Claim your third stimulus payment on your tax return for 2021 – Forbes Advisor
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According to the IRS, nearly $ 390 billion in third stimulus payments had been sent to Americans as of June 2021. Although most people received their third stimulus payment, some did not.
In March 2021, the IRS began issuing the third economic impact payments (better known as stimulus payments) and will continue to do so until the end of the year. These payments were part of the American Rescue Plan Act, a $ 1.9 trillion Covid-19 stimulus package aimed at helping the economy during the pandemic.
But for those who haven’t received their payments by the end of the year or have received a partial amount, the IRS gives you a second chance: you can claim the amount as a recovery refund credit. on your 2021 tax return that you file next year.
How to Claim Your Missing Third Stimulus Payment on Your 2021 Tax Return
After December 31, you will need to claim any missing third stimulus payment on your 2021 tax return by claiming the clawback refund tax credit. This is the case if you received a partial amount (less than the total stimulus payment amount of $ 1,400) or if you were not eligible for the third stimulus payment previously.
Let’s say you’re single and your income for the 2020 and 2019 tax years exceeds the threshold (which we’ll talk about later). However, you lost your job in 2021, so your income has dropped significantly. You can now claim the recovery refund tax credit since your income has fallen below the threshold.
You need to complete the recovery refund tax credit worksheet and submit it with your 2021 tax return. If you are using tax software, it should guide you through the process.
Before you complete the worksheet, you should know the amount of any third stimulus payment received for you, your spouse, and any dependents. The worksheet will also ask for your Adjusted Gross Income (AGI) for the year to determine your eligibility.
If you are unsure of the amount of your third stimulus payment, you should check your IRS online account or use the Get My Payment app. You can also refer to your Notice 1444-C, a letter sent by the IRS to recipients, which indicates the third stimulus payment amount for 2021.
In January 2022, the IRS will mail Letter 6475 confirming the total amount of third stimulus payments received for the 2021 tax year.
After determining the exact amount of your recovery refund credit, you will need to report it on line 30 of your 2021 tax return.
Unlike direct stimulus payments, where the payments were issued directly by the federal government to eligible people, the clawback refund tax credit will reduce any tax owed or increase your tax refund.
Who is eligible for the Third Incentive Payments?
Generally, if you are a U.S. citizen (or an alien residing in the United States) and you are not dependent on another taxpayer, you are entitled to the full third stimulus payment. In addition, your adjusted gross income (AGI) cannot exceed:
- $ 150,000 for joint filing
- $ 112,500 for heads of families
- $ 75,000 for single filers
Partial payment may be available if your income exceeds the thresholds. However, you will not receive any payment if your AGI is at least:
- $ 160,000 for joint filing
- $ 120,000 for heads of families
- $ 80,000 for single filers
The total amount of the third stimulus payment is $ 1,400 per person ($ 2,800 for married couples filing a joint tax return) and an additional $ 1,400 for each eligible dependent.
It’s not too late to receive your third stimulus payment
The IRS will continue to process third stimulus payments until December 31.
The agency will use your tax information on file to determine your eligibility and process your third stimulus payment. Typically, you will need to file your 2019 or 2020 income tax return to be eligible for your payments.
You may still be eligible for payment, even if you typically don’t file a tax return, by making sure to register using the non-filer tool. You will need to enter your social security number or your individual tax identification number (ITIN), your mailing address, your phone number and your bank details.
For 2021, married couples who are filing jointly and whose income is less than $ 24,800 ($ 12,400 or less for single filers) are not required to file an income tax return. Usually, the IRS takes 2-3 weeks to process an electronically filed tax return, so you’ll need to do it quickly.