Q. My wife and I qualified for the third stimulus payment of $2,400 because our total gross income in 2020 was less than $150,000.00. In 2020, we received both the first and second stimulus funds. We sold our house in the first half of 2021, and for some reason, the IRS mailed a paper check instead of sending a direct transfer for the third stimulus, which we never received. When we called the IRS, we were told that we needed to file the Recovery Rebate Credit in order to get the funds. However, by the time we filed, our aggregate gross revenue in 2021 exceeded $150,000. We were no longer eligible, according to the IRS. I believe we were duped out of the money since we relocated and the IRS failed to send the direct transfer. What are your thoughts?
A. This is a difficult question, but you’re out of luck.
The income limitations for the stimulus program were strict, but as you can see, the timing had a big role in whether or not some people received funds.
There is a distinction between what sounds “right” and what is “proper,” according to Steven Gallo, a certified public accountant and personal financial consultant with U.S. Financial Services in Fairfield.
He confirmed that the information you have received is correct.
“The third stimulus check, given in early 2021, was an advance payment of the 2021 Recovery Rebate Credit based on 2019 or 2020 tax information,” Gallo explained. “If you had gotten the cheque, you could have kept the monies even though your 2021 income surpassed the $150,000 cap.”
According to him, the IRS did not require taxpayers to record any stimulus cheques received in 2021.
If you did not receive your check, you could still file for the 2021 Recovery Rebate Credit when submitting your 2021 tax return, but you would be subject to the $150,000 income limit, he explained.
This is where the distinction between “correct” and “right” comes into play, according to him.
“The fact that your check was never delivered through no fault of your own obliged you to verify your eligibility on your 2021 tax return when others who received their payout in advance had no such necessity,” he stated. “I’m sorry to report, but you appear to be a victim of one of the Recovery Rebate program’s many peculiarities.”