Million in the Mail: Unclaimed Tax Credits Could Mean Extra Cash in January
CNN reports that a whopping one million taxpayers in the US are in for a pleasant surprise in January. The IRS is sending out letters to alert these individuals that they’re entitled to money from the Recovery Rebate Credit, valued at up to $1,400 per person (plus an additional $1,400 per qualifying dependent). But here’s the catch – they didn’t claim it in their 2021 federal tax returns.
Who’s Eligible?
The Recovery Rebate Credit was designed for folks who missed out on one or more of the pandemic-era Economic Impact Payments. To be eligible, your 2021 adjusted gross income had to be below certain thresholds: $160,000 for married filing jointly, $120,000 for heads of households, and $80,000 for singles. It’s a refundable credit, meaning you can still get the money even if you didn’t owe any federal income tax for 2021.
IRS Commissioner Danny Werfel explained, "We’re committed to helping taxpayers get back every dollar they deserve. We’re sending these payments automatically to minimize hassle and get this money to eligible people."
When and How Will Payments Arrive?
The IRS estimates that these payments, totaling approximately $2.4 billion, will be dispersed toward the end of January. They’ll be made either by direct deposit (to the bank account on file for your 2023 tax return, or your 2021 return if that’s not available) or by paper check sent to your last known address. If a direct deposit is returned for any reason, the IRS will reissue the payment as a paper check.
"For those who still haven’t filed their 2021 tax return, there’s still time to claim this credit – and any other refunds you may be owed," the IRS advises. The deadline for filing your 2021 return is April 15, 2025.
