Q. My wife and I were eligible for the third stimulus payment of $2,400 because we had a combined gross income of less than $150,000.00 in 2020. We received both the first and second stimulus payments in 2020. We sold our home in the first half of 2021, and for whatever reason, the IRS sent a paper check instead of a direct down payment for the third stimulus, which we never have received. When we called the IRS, they said we had to file the Recovery Rebate Credit to get the money. But by the time we filed, our combined gross income in 2021 was over $150,000. The IRS confirmed that we were no longer eligible. I feel like we got sucked out of the money because we moved and the IRS didn’t send the direct deposit. What do you think?
– Baffled dummy
A. This is a tough one, but you’re out of luck.
The income limits of the stimulus program were strict, but as you’ve seen, the timing had a lot to do with whether some people received the payments.
There’s a difference between something that sounds “right” and something that is “right,” says Steven Gallo, a chartered accountant and personal finance specialist at US Financial Services in Fairfield.
He said the information you received is correct.
“The third stimulus check issued in early 2021 was an advance on the 2021 recovery credit and was based on 2019 or 2020 tax information,” Gallo said. “Had you received that check, you could have kept the money even though your income passed the $150,000 threshold in 2021.”
The IRS did not require taxpayers to report in any way stimulus checks they received in 2021, he said.
However, if you didn’t receive your check, you were entitled to claim the 2021 Recovery Rebate Credit when you filed your 2021 tax return, but you were now subject to the $150,000 income limit, he said.
This is where the difference between “correct” and “right” comes into play, he said.
“The fact that your check was never delivered through no fault of your own forced you to verify your eligibility on your 2021 tax return, while others who received their prepayment had no such requirement and that just doesn’t seem right” , he said. “I’m sorry to say, but you seem to be a victim of one of the many quirks in the Recovery Rebate program.”
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Karin Price Mueller writes the obsessed column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.coms weekly electronic newsletter.