IRS Issues Warning on Recovery Rebate Credit Eligibility Deadline

WASHINGTON – The Internal Revenue Service (IRS) announced plans in December 2024 to automatically issue payments to eligible individuals who did not claim the Recovery Rebate Credit on their 2021 tax returns. According to the IRS, millions of taxpayers qualified for over $1 billion in unclaimed 2021 refunds.

However, the deadline to file a 2021 tax return and claim potential refunds, including the $1,400 stimulus payment, expired on April 15, 2025. Taxpayers who did not file by this deadline forfeited their rights to refunds, refundable tax credits, and overpayments, including the Earned Income Tax Credit (EITC) and Recovery Rebate Credit.

The Recovery Rebate Credit was specifically designed for individuals who did not receive Economic Impact Payments (stimulus payments). The payments, which varied based on eligibility, featured a maximum payment of $1,400 per person, totaling approximately $2.4 billion distributed nationwide.

IRS regulations enforce a strict three-year filing window for claiming refunds, meaning that any unpaid credits or overpayments cannot be applied to underpaid taxes in other years. The agency confirmed that after this three-year period, any unclaimed funds would be transferred to the U.S. Treasury and could not be reclaimed.

No extensions or appeals are available for those who missed the April 2025 cut-off, leaving unclaimed funds permanently inaccessible for eligible taxpayers. If you think you may be entitled to a refund, individuals can call 800-829-1040 from 7 a.m. to 7 p.m. local time, while businesses can use 800-829-4933 during the same hours.

The $1,400 stimulus payment was part of the American Rescue Plan Act, approved in 2021, aimed at providing economic relief during the COVID-19 pandemic. Although the first wave of payments was distributed in 2021, many qualified individuals either did not receive them or became eligible later due to changes in income or dependent status.

As of 2025, the IRS has reopened eligibility checks and rectification files for individuals who missed their stimulus or qualified for the Recovery Rebate Credit. It is imperative for affected individuals to verify their eligibility, claim lost payments, and ensure they are claiming the $1,400 stimulus check appropriately on their tax returns.

Ultimately, taxpayers should act quickly to file their 2021 returns to avoid leaving any money on the table.