The Internal Revenue Service (IRS) is issuing a final call to taxpayers who have yet to claim their coronavirus-era tax credits, with a crucial deadline fast approaching. These tax credits were introduced as financial relief during the COVID-19 pandemic and will become unavailable after May 2024. This means individuals who haven’t submitted their 2020 tax returns will miss the opportunity to claim these benefits if they don’t act promptly.
The relief in question pertains to the Economic Impact Payments, commonly known as stimulus checks, which were distributed in three phases during 2020 and the early part of 2021. These payments were designed to help Americans weather the economic storm brought on by the pandemic. Eligible individuals who did not receive these payments can claim them through the Recovery Rebate Credit on Form 1040 or Form 1040-SR, the standard forms for individual income tax returns.
The significance of these payments cannot be overstated, as they provided up to $1,200 for single filers and $2,400 for married couples filing jointly. To claim the Recovery Rebate Credit, individuals must file a tax return, even if they typically wouldn’t need to due to having minimal or no income.
With the deadline for the 2020 tax year set for May 17, 2024, time is of the essence. This date marks exactly three years from the original filing deadline in 2021 and represents the last chance to claim the credit for that year. Those who need to file for the 2021 tax year have until April 15, 2025.
Eligibility for the Recovery Rebate Credit extends to U.S. citizens, green card holders, and qualifying resident noncitizens who are not claimed as dependents by another taxpayer and possess a valid Social Security number. The IRS initially set the income thresholds for full payment eligibility at $75,000 for single filers and $150,000 for married couples filing jointly, with the payment amount decreasing incrementally for incomes above these levels. Notably, individuals earning over $99,000 and couples earning more than $198,000 without children are ineligible.
Furthermore, the IRS has made provisions for claiming the 2020 Recovery Rebate Credit for individuals who passed away in 2020 or later, though specific details regarding the timeframe for such claims have not been clarified.
Importantly, there are no penalties for late filings when it comes to tax credits or refunds. The IRS encourages opting for direct deposit to expedite the receipt of funds. Additional information specific to each state is expected to be released by the IRS in late March, providing further guidance for those looking to claim their credits.
