As we head into the new year, some individuals may be receiving a new stimulus payment. During the COVID19 pandemic, the US government distributed a variety of stimulus checks and rebates in order to help struggling families cover immediate expenses amidst job insecurity, but also to promote spending in the economy to prevent a recession. Now, you still have the chance to claim one of the credits if you did not do so in 2021.
Claim your $1,400 recovery rebate credit
During the pandemic, three stimulus payments were sent to households. The Recovery Rebate Credit was one such payment where in March 2021, eligible tax filers could receive $1,400 per income tax filer and $1,400 per child under the American Rescue Plan Act. The American Rescue Plan was a a US$1.9 trillion economic stimulus bill passed by congress and signed into law by President Joe Biden on March 11, 2021. The bill intended to speed up the country’s recovery from the economic and health detriments of the COVID19 pandemic.
In December of 2024, the IRS began releasing Recovery Rebate Credits to eligible individuals who did not claim their credit in 2021 on their tax returns at the time. Some individuals also received less than what was fully owed to them at the time. These individuals will also be seeing that mistake amended to ensure that they do receive the full $1,400 they are entitled to.
No further action needed by eligible recipients
If you qualify for the unclaimed Recovery Rebate Credit, there is no further action needed on your part. The IRS will automatically deposit the money to you. Some phishing scammers have been aware of the IRS releasing these funds and are attempting to con people into giving them their personal financial information under the guise of being the IRS and requiring your financial information to receive the credit.
“To make this process easier and ensure that this money goes to those who need it, we are making these automatic payments, which means taxpayers will not have to file an amended return to receive it,” said IRS Commissioner Danny Werfel in a December 2024 statement.
How to track your refund status
The IRS recommends using their “Where’s My Refund?” tool to track the status of your refund if you suspect that you are owed the recovery rebate credit. In order to use the tool, you will need to have the following information:
- Your Social Security number or Individual Taxpayer Identification Number (ITIN)
- Marital status
- The exact amount of the refund on your return
If you use the tool, it will provide you with the following three statuses of where your refund is at:
- “Return received: We have received your return and are processing it.”
- “Refund approved: We have approved your refund and are preparing to issue it on the date indicated.”
- “Refund sent: We sent the refund to your bank or to you by mail. It may take up to 5 days for it to appear in your bank account or several weeks for your check to arrive in the mail.”
Looking after your financial wellbeing
While stimulus payments like the Recovery Rebate Credit can offer some immediate financial relief, it is important that you are consistently monitoring your finances and budgeting. For long term financial health, and to alleviate your own stress, ensure that you are on top of your finances and that you are living below your means and not spending more than you can afford.
If you are unsure how to increase the longevity of your finances, many experts recommended that you start investing your money. Beating inflation and using the power of compound interest to your advantage as early as possible is essential to ensure that you can retire comfortable without financial stress.
