Last year, the IRS distributed third stimulus checks to over 175 million Americans, totaling up to $1,400 for each eligible adult and child. If you believe you were due a payment or received less than you were entitled to, you must claim the Recovery Rebate Credit on your 2021 federal tax return.
To determine the amount of your 2021 stimulus payment, you must first consult IRS Letter 6475, Your Third Economic Impact Payment, which was mailed earlier this year to recipients. It includes the entirety of the money from your stimulus check, including any “plus-up” payments.
Here’s what to do if you didn’t receive or misplaced your Letter 6475, or if the IRS never sent you the stimulus money it claims to have sent you.
What prompted me to receive IRS Letter 6475?
According to the IRS, Economic Impact Payment letters contain critical information that can assist you in filing your tax return quickly and accurately, including the total amount of your third stimulus payment.
This could include “plus-up” payments, which the IRS made to individuals who qualified for a higher amount based on their 2019 or 2020 tax returns, or information obtained from the Social Security Administration, the Department of Veterans Affairs, or the Railroad Retirement Board.
Even though stimulus money is not taxable income, you must report it on your IRS return. According to IRS Commissioner Charles P. Retting, the IRS will receive over 10 million returns in 2020 that incorrectly report stimulus funds, resulting in manual reviews and significant refund delays.
You may have already received a Letter 1444-C indicating the amount paid and the method of payment, but this is not the document you want to use to prepare your 2021 return.
What am I to do with the letter requesting a stimulus check?
If you are working with a professional tax preparer, provide them with Letter 6475 in addition to all other required tax documents. If you are preparing your own return, use the amount shown in Letter 6475 on the Recovery Rebate Worksheet to determine if you are eligible for a credit. Then, on Line 30 of IRS Form 40, enter that credit.
The Recovery Rebate Worksheet is included in the IRS Form 1040 instructions and is automatically calculated by tax preparation software.
According to the H&R Block website, “submitting the incorrect amount on your return may trigger a manual review,” which could delay a refund by weeks.
How do I determine if I am eligible for additional stimulus funds?
Payments under the stimulus programme ceased on December 31, 2021. While the majority of Americans received their full payments, there are a few reasons you may have received less than you are entitled to: If you had a baby or added qualifying children to your family in 2021, you are entitled to an additional $1,400 per child.
Similarly, if your income decreased significantly last year, you may owe additional money.
If you believe you are entitled to more stimulus money than you received in 2021, the best tax software will automatically calculate your recovery rebate credit and include the difference on line 30 of your IRS Form 1040.
If you want to calculate your potential recovery rebate credit on your own, follow the IRS instructions for Form 1040 and use the Recovery Rebate Credit Worksheet.
What if I never received or misplaced Letter 6475?
If you never received a third stimulus check, you did not receive Letter 6475 from the IRS. If you were eligible but did not receive a payment in 2021, you can claim the recovery rebate tax credit on your 2021 tax return to receive the funds.
If you received a third stimulus check but never received Letter 6475 or misplaced it, you can view the amount of your economic impact payments by logging into your online IRS account. After logging in, click the View Tax Records link, followed by the plus sign next to the year 2021 in the Economic Impact Payment Information section.
If you are married and filing a joint tax return, both you and your spouse must log into your online IRS accounts and add the amount of your payments to determine your total stimulus check payments for 2021.
What if Letter 6475 indicates that I received money when I actually did not?
To begin, the IRS recommends that you verify your bank account records for 2021. They recommend specifically looking for IRS deposits in the spring or early summer.
Following that, log into your IRS online account. The IRS website will contain more current information than Letter 6475, especially if a payment was returned. If your online account indicates that you received stimulus payments but have not received the funds, you should immediately contact the IRS to determine whether a payment trace is required.
What if I misreported my stimulus funds?
If you have already filed your 2021 tax return and discovered that you incorrectly reported your stimulus check payments, do not file an amended return. According to the IRS, it will correct any errors and notify you of the changes made to your return.
Even if you do not need to file an amended return, reporting stimulus money incorrectly will almost certainly delay the processing of your return and any potential tax refund. As mentioned previously, stimulus payment errors were a significant cause of IRS delays last year.
If, on the other hand, you filed your 2021 tax return with a zero recovery rebate credit and wish to claim additional stimulus funds, you must file an amended return using IRS Form 1040 X.
Should I retain Letter 6475 once my taxes are filed?
According to Mark Steber, chief tax information officer at Jackson Hewitt, you should always save tax-related documents: W-2s, interest statements, and IRS letters serve as an excellent record of your account “in case anything happens in the next two or three years,” he explains.
Additionally, the IRS recommends retaining all documents pertaining to income, deductions, credits, and other tax items for a period of at least three years.