IRS Announces Automatic Payments for Recovery Rebate Credit: A Guide for Immigrants and Others

The IRS has announced automatic payments for individuals who missed claiming the Recovery Rebate Credit on their 2021 tax returns. This initiative ensures eligible taxpayers, including many immigrants, receive payments they are entitled to—without needing to file an amended tax return.

For immigrants and others, this announcement could mean recovering up to $1,400 per individual in missed stimulus payments.

What Is the Recovery Rebate Credit?

The Recovery Rebate Credit is a refundable credit for individuals who didn’t receive the full Economic Impact Payments (EIPs) (stimulus checks) issued during the COVID-19 pandemic. If you were eligible but didn’t claim the credit on your 2021 tax return, the IRS is now stepping in to send the payments automatically.

If you're unsure about your eligibility or need help navigating the process, then lets read through this.

Selection Criteria for Recovery Rebate Credit

To qualify for the Recovery Rebate Credit and receive the automatic payment, taxpayers must meet the following conditions:

1. Filed a 2021 Tax Return: You must have submitted a tax return for the 2021 tax year.

2. Recovery Rebate Credit Field Left Blank or Incorrect: If the Recovery Rebate Credit section on your 2021 return was either:

   • Left blank, or

   • Incorrectly filled out as $0, but you were actually eligible for the credit.

3. Income Criteria:

   • Single filers with Adjusted Gross Income (AGI) up to $75,000 are eligible for the full credit (phasing out completely at $87,000).

   • Married couples filing jointly with AGI up to $150,000 are eligible for the full credit (phasing out completely at $174,000).

4. Valid Social Security Number (SSN): At least one filer or spouse (if filing jointly) must have a valid SSN, and qualifying dependents must also have valid SSNs.

5. Residency Requirement: Must be a U.S. resident alien for tax purposes in 2021.

If you're unsure about any of these criteria, Lesser Tax can help review your tax records and confirm your eligibility.

How This Helps Immigrants (like H1B Visa Holders)

Let’s look at an example to understand how this works:

Scenario:

• Rajesh, an H1B visa holder, started working in the U.S. in 2021 after transitioning from an OPT visa.

• He filed a 2021 tax return but didn’t realize he was eligible for the Recovery Rebate Credit because his employer-sponsored move kept him unaware of U.S. tax rules.

• Rajesh’s 2021 tax return either left the Recovery Rebate Credit field blank or incorrectly claimed $0.

Outcome:

• Thanks to this IRS initiative, Rajesh doesn’t need to do anything to claim the missed stimulus payment. By late January 2025, the IRS will automatically send him up to $1,400, depending on his eligibility.

• The payment will be sent to the bank account listed on his 2023 tax return or mailed to his address of record.

• Rajesh will also receive a letter confirming the payment, ensuring transparency.

What About Those Who Didn’t File a 2021 Tax Return?

If you didn’t file a 2021 tax return but were eligible for the Recovery Rebate Credit, there’s still time! You can claim the credit by filing your 2021 tax return before April 15, 2025.

Why This Matters for Immigrants on H1B and Other Visas

Immigrants often face unique challenges when navigating the U.S. tax system:

• Unfamiliarity with Tax Rules: Transitioning to the U.S. can lead to confusion about credits and refunds, such as the Recovery Rebate Credit.

• Visa Adjustments: Changes in immigration status (e.g., OPT to H1B) often result in uncertainty about tax obligations.

• Missed Payments: Many H1B workers, especially those new to filing U.S. taxes, may not have realized they were eligible for stimulus payments.

This automatic payment initiative ensures these taxpayers don’t miss out on benefits they deserve. For more complicated situations, Lesser Tax is here to help.

Act Now and Secure Your Refund

If you’re an immigrant taxpayer who didn’t claim the Recovery Rebate Credit on your 2021 tax return, this IRS initiative can bring much-needed financial relief. And if you still haven’t filed, don’t worry—there’s time to act. Lesser Tax is here to help you navigate the process, maximize your refunds, and take full advantage of available credits.

If you’d like tailored tax planning advice, explore our services at lesser.tax. Let’s maximize your savings together!