As we step into the upcoming year, there’s good news for some as new stimulus payments might be on the horizon. Throughout the COVID-19 pandemic, the U.S. government rolled out several rounds of stimulus checks and tax rebates to help families grappling with financial uncertainties and to stimulate spending to fend off a recession. If you missed out on these benefits in 2021, you still have an opportunity to claim these credits.
Secure Your $1,400 Recovery Rebate Credit
During the height of the pandemic, three rounds of stimulus payments were distributed to American households. One of these was the Recovery Rebate Credit, which was provided in March 2021 as part of the American Rescue Plan Act—a massive $1.9 trillion stimulus package approved by Congress and enacted by President Joe Biden on March 11, 2021. This legislation aimed to accelerate the nation’s recovery from the economic and health impacts of the COVID-19 pandemic.
In December 2024, the IRS started issuing Recovery Rebate Credits to those who hadn’t claimed them on their 2021 tax returns. Additionally, those who received less than what they were entitled to initially are also being compensated to rectify this error, ensuring they receive the full $1,400 to which they are entitled.
No Additional Steps Required for Qualified Individuals
If you’re eligible for the unclaimed Recovery Rebate Credit, no further action is required from you. The IRS will automatically process and send the payments to eligible recipients. However, be aware of phishing scams, as fraudsters are trying to exploit the situation by impersonating the IRS and asking for personal financial information under the false pretense of needing it to process the credit.
“The automatic distribution of these funds means that taxpayers won’t need to file an amended return to get their credit,” stated IRS Commissioner Danny Werfel in a statement from December 2024.
Track Your Refund Status Easily
The IRS advises using their “Where’s My Refund?” tool to check the status of your refund if you believe you are due a recovery rebate credit. To use this tool effectively, you will need:
- Your Social Security number or Individual Taxpayer Identification Number (ITIN)
- Your filing status
- The exact refund amount reported on your tax return
Upon entering your information, the tool will update you with one of three statuses concerning your refund:
- “Return received: Your return is in our system and is being processed.”
- “Refund approved: Your refund has been processed and payment is scheduled for the date shown.”
- “Refund sent: Your refund has been dispatched to your bank or mailed out. It may take up to five business days to appear in your bank account or a few weeks for your check to arrive by mail.”
Protecting Your Financial Health
While stimulus payments such as the Recovery Rebate Credit provide short-term financial relief, it is crucial to keep a close eye on your financial situation and budget meticulously. For sustained financial well-being and to minimize stress, it’s important to manage your finances prudently, ensuring you live within your means and avoid overspending.
If you’re looking for ways to enhance your financial longevity, many financial experts suggest investing early. This strategy helps combat inflation and harnesses the power of compound interest, setting you on a path towards a comfortable and financially secure retirement.
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Calvin Baxter is an economic analyst specializing in the evolving US labor market. He leverages real data to provide you with concrete recommendations and help you adjust your professional strategies.