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If you had a new baby in 2021 or graduated college in the Class of 2020, you might be eligible for up to $1,400 in stimulus money. The Recovery Rebate Credit was created to help those who are missing an economic stimulus payment or received less than the full amount on their 2020 or 2021 federal tax return, the IRS said.
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However, taxpayers also face some serious delays on their federal income tax refunds if incorrect information is used to claim the credit, as previously reported by GOBankingRates.
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The IRS has reported seeing mistakes in claiming the recovery rebate credit and has warned taxpayers that it could add several weeks to the processing time of their federal tax return, the Detroit Free Press noted.
If you qualify for the credit, the only way to claim it is by filing a 2021 tax return.
“We have come across clients that were unaware that they could claim the credit,” Matt Hetherwick, director of individual tax programs for the nonprofit Accounting Aid Society in Detroit, explained to the Detroit Free Press. “The past few years have been challenging because of the disruptions and changes to tax law,” he added.
You will need the total amount of your third economic impact payment and any plus-up payments to claim the 2021 recovery rebate credit. You can find the total amount from your IRS Online Account or Letter 6475.
If you file your 2021 tax return electronically, the tax software can help you figure out your 2021 recovery rebate credit. If you qualify, the credit will reduce any tax you owe for 2021, or it will increase the size of your federal income tax refund.
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About the Author
Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.