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Maximizing Your Stimulus Payments: Eligibility and Claiming Tips

The American Rescue Plan Act of 2021 authorized a third round of stimulus payments to help alleviate the financial burden caused by the COVID-19 pandemic. The payments, also known as Economic Impact Payments, were sent out to millions of Americans based on their eligibility.

However, not everyone received the full amount they were entitled to. In this article, we will discuss the eligibility requirements for stimulus payments and how to claim any missing payments.

Eligibility for Stimulus Payments

To be eligible for the third stimulus payment, you must be a U.S. citizen or lawful resident with a valid Social Security number. Additionally, you must not be claimed as a dependent on someone else’s tax return.

The payments are also income-based, meaning that they phase out for those earning above a certain threshold.

Deadline to Claim Third Stimulus Payment

If you did not receive the full amount of your third stimulus payment, you can claim the difference as a Recovery Rebate Credit on your 2021 tax return. The deadline to claim this credit is October 15, 2022.

To claim the credit, you will need to file your 2021 tax return and complete the appropriate section for the Recovery Rebate Credit.

How to Claim the Recovery Rebate Credit

Claiming the Recovery Rebate Credit is simple and can be done using tax software or by filling out IRS Form 1040. You will need to provide information about any stimulus payments you received in 2020 and 2021.

If you have direct deposit set up with the IRS, any credit you are entitled to will be deposited directly into your bank account. If not, you will receive a check in the mail.

If you did not receive stimulus payments or only received part of the amount you were entitled to, you may be eligible for the Recovery Rebate Credit.

Income and Adjusted Gross Income Requirements

The amount of stimulus payment you receive is based on your adjusted gross income (AGI). AGI includes all income sources, including wages, self-employment income, and investment income.

The income limits for the third round of stimulus payments were:

– $75,000 for single filers

– $150,000 for married filing jointly

– $112,500 for head of household

Eligibility Based on Income

Those earning above the income limits will have their stimulus payments phased out. For every $1,000 of AGI above the income limit, your stimulus payment will be reduced by $50.

For example, if you are a single filer with an AGI of $80,000, your stimulus payment will be reduced by $250 ($50 x 5).

Claiming the Correct Stimulus Payment

If you received stimulus payments in 2020 and 2021, you may need to claim the correct amount on your tax return. The Recovery Rebate Credit Worksheet can help you determine the correct amount you should have received based on your AGI.

To claim the credit, you will need to fill out IRS Form 1040 and attach the worksheet. If you are eligible for a credit, it will either reduce your tax liability or increase your tax refund.

In conclusion, understanding eligibility requirements and how to claim missing stimulus payments or credits can help alleviate financial burdens caused by the pandemic. Be sure to file your taxes correctly and claim any credits you are eligible for to make the most out of the stimulus payments.

The pandemic has disproportionately affected families with young children, which is why the stimulus packages have included additional benefits for those with dependents. In this section, we will discuss how families can claim stimulus payments for their dependents and the new Child Tax Credit that has been introduced for 2021.

Claiming Stimulus Payment for Dependents and Child Tax Credit

The first two rounds of stimulus payments included an additional $500 per dependent under the age of 17. However, the third stimulus payment expanded this benefit to include dependents of all ages, including college students and elderly dependents.

To claim the dependent stimulus payment, you must have claimed the dependent on your 2019 or 2020 tax return.

Claiming Stimulus Payment for a Child Born in 2021

If you had a child in 2021 and did not receive the additional stimulus payment for them, you can claim it on your 2021 tax return using the Recovery Rebate Credit. This credit allows you to claim any stimulus payments you were eligible for but did not receive.

To claim the credit for your new child, you will need to provide their Social Security number and indicate that they were born in 2021.

Claiming the Child Tax Credit

The Child Tax Credit has been expanded for 2021 and now provides up to $3,000 per child aged 6 to 17 years and up to $3,600 per child under the age of 6. The credit is fully refundable, meaning that even if you do not owe any taxes, you can still receive the full amount.

Additionally, the credit is being paid out in advance, starting in July 2021.

To qualify for the Child Tax Credit, your child must be under the age of 18, have a valid Social Security number, and be claimed as a dependent on your tax return.

The credit phases out for those earning above a certain income limit ($75,000 for single filers, $150,000 for married filing jointly, and $112,500 for head of household).

To claim the full Child Tax Credit, you must ensure that your child’s information is up-to-date with the IRS.

This includes providing their Social Security number and confirming that they live with you for more than half the year. To receive the monthly advance payments, you must also ensure that you have filed your 2019 or 2020 tax return and provided direct deposit information to the IRS.

If you are not eligible for the full Child Tax Credit, you can still claim a portion of it using the Recovery Rebate Credit on your 2021 tax return.

In conclusion, families with dependents have additional benefits available to them through stimulus payments and the new Child Tax Credit.

If you have not received the full benefits you are entitled to, be sure to claim them using the appropriate credits and ensure that your dependent’s information is up-to-date with the IRS. These benefits can help ease the financial burden on families and provide much-needed relief during these challenging times.

In conclusion, the American Rescue Plan Act has authorized the issuance of three rounds of stimulus payments to help struggling Americans amid the COVID-19 pandemic. Eligibility for these payments is based on income, citizenship, and dependent status.

Those who do not receive the full payment they are entitled to can claim it using the Recovery Rebate Credit on their 2021 tax return, including additional payments for children born in 2021. Families with dependents can also benefit from the expanded Child Tax Credit, which provides additional financial assistance and is fully refundable and paid out in advance.

It is crucial to stay up-to-date with the latest tax filing information to ensure eligibility for these benefits. Overall, understanding and claiming these benefits can help alleviate the financial burden and provide much-needed relief for families and individuals struggling during these challenging times.

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