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3 reasons why you might have missed out on stimulus money and what to do

2021-03-12T10:39:00

(BPT) - At a time when people are struggling financially in the wake of the COVID-19 pandemic, they may have also missed out on all or part of their first and second full stimulus payments, money intended to help during a critical time. New parents and recent graduates could have unknowingly missed out on stimulus money and could claim a credit when they file a tax return.

Specifically, the first two stimulus payments were calculated using 2019 tax returns and for some people on 2018 returns, meaning the IRS wouldn’t have known about 2020 life changes such as adding new dependents, becoming a first-time filer, or reduced income if they didn’t receive the full amount. These individuals are likely due additional stimulus payments with the help of the 2020 Recovery Rebate Credit.

“COVID has impacted nearly everyone’s taxes. As you navigate the recovery rebate credit and your tax situation you can get help online, virtually or in person from H&R Block’s highly trained tax pros," said H&R Block Chief Tax Officer Kathy Pickering. “Working with a tax pro can help you feel confident that you can receive your full stimulus amount added to your refund.”

Reasons to use the 2020 Recovery Rebate Credit to claim missed stimulus payments:

1. Unemployed or reduced income in 2020

For people whose income was above the income caps for the first and second stimulus payments but whose income was reduced in 2020 to under the income caps, additional stimulus payments via the 2020 Recovery Rebate Credit may be available. To understand more about the tax implications of unemployment benefits, visit H&R Block's unemployment and taxes resource center.

2. Expanded family with a new child

Many things happen in life that the IRS doesn’t know about until a tax return is filed, including having a baby, adopting or fostering a child. Approximately 3.7 million babies were born in 2020 and roughly 140,000 children adopted[1] in the United States. Families who added a child not previously claimed as a dependent on their tax return may be eligible for additional stimulus money.

3. First-time filers like recent college graduates

According to the Department of Education, 5.7 million students received high school or undergraduate degrees in 2020. Those starting careers will become first-time filers and likely can’t be claimed as a dependent, possibly making them eligible for stimulus money. For example, if a college graduate was a dependent in 2019, graduated and moved out on their own and started a new job, they are likely eligible for the 2020 Recovery Rebate Credit.

For help in understanding a tax situation and to find out more about who may be eligible for additional stimulus money, find a tax pro at hrblock.com. There is no additional cost for claiming a Recovery Rebate Credit whether a client chooses to get help from our experts or to do taxes on their own, including in H&R Block Free Online.



[1] Adoption Network, U.S. Adoption Statistics.

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