Around March and April of 2021, you may have noticed an extra amount of money arrive in your bank account. The third stimulus payment of the American Recovery Credit was $1400 for each individual in a household. The credit was reduced for higher-earning individuals and families ($150,000 if married, $122,500 for head of household and $75,000 for single). This non-taxable payment was the last of the stimulus payments in response to the COVID pandemic. Some of us saw the amount dropped into our account immediately, while others had to wait a bit longer or may not have received it at all. The IRS was backlogged due to COVID in 2020 and saw even slower response times in 2021. After a point, they decided to stop issuing the stimulus payment, and it became part of the 2021 filing as a credit you could get when you filed.
The issues showing up this tax season are that some individuals are getting letters that they received the third stimulus but never saw the money hit their accounts or come in check form. Others did not get the total amount expected, and others may have gotten more than they should have. Those individuals who share dependency with someone else by alternating the claiming of a dependent child may have received the credit when they should not have, and the other individual may or may not have gotten the credit also. Anyone who had a dependent born in 2021 after the stimulus came out can also claim the credit. Because of all of this, it is essential to review any letters and deposits you may have received before filing your taxes. Otherwise, you may see a delay in your refund while the IRS checks the accuracy of the return where it comes to these COVID programs and credits.
