You may be eligible for up to $1,400 in stimulus money if you had a new baby in 2021 or graduated from college in the Class of 2020. According to the IRS, the Recovery Rebate Credit was established to assist persons who did not get an economic stimulus payment or received less than the entire amount on their federal tax return in 2020 or 2021.
However, as previously noted by GOBankingRates, customers may suffer significant delays in receiving their federal income tax returns if erroneous information is utilized to claim the credit.
According to the Detroit Free Press, the IRS has reported detecting errors in claiming the recovery rebate credit and has advised taxpayers that it could delay their federal tax return preparation by several weeks.
The only option to claim the credit if you qualify is to file a 2021 tax return.
“We’ve had customers who were completely ignorant that they were eligible for the credit,” Matt Hetherwick, director of individual tax services for the Detroit-based nonprofit Accounting Aid Society, told the Detroit Free Press. “The disruptions and changes in tax law have made the last few years difficult,” he continued.
To claim the 2021 recovery rebate credit, you’ll need the total amount of your third economic impact payment plus any plus-up payments. The total amount can be found in your IRS Online Account or Letter 6475.
If you file your 2021 tax return electronically, tax software can assist you in calculating your recovery rebate credit for that year. If you qualify, the credit will either reduce or raise the size of your federal income tax refund in 2021.
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