An economic stimulus is coming for some inflation-rattled consumers. Stimulus checks worth $1,400 per family member, offered as part of last year’s American Rescue Plan, are still unclaimed. The Internal Revenue Service (IRS) is now sending letters to 9 million households affected, telling them they can get the cash as relief from their 2021 taxes. All they need to do is file a return to receive their IRS stimulus checks.
A family of four that has yet to file a 2021 return could be eligible for as much as $5,600 in relief.
IRS Stimulus Checks: What’s Going On?
The American Rescue Plan, passed in the early days of President Joe Biden’s administration, included rental assistance, tax rebates and direct payments to families, as well as funds to distribute vaccines. The planned relief payments totaled over $900 billion. That was on top of relief checks sent out by former President Donald Trump’s administration in 2020.
But many people who don’t file taxes were missed by the new payments. The government couldn’t find them to give them their money. Some were homeless, while others lacked bank accounts or internet access. Some were filing taxes for the first time. Others had family members who were not in the country legally and thus feared any government contact.
The IRS letters are an effort to find these people. While the last normal extension for filing was Oct. 17, some people can still file a simplified return by Nov. 15 and get relief.
The letters are going out near a close midterm election, however, in which Republicans have made the IRS
a political issue. While the agency won increased funding recently, and is being used as a prime mechanism for delivering relief, the agency lacks a new commissioner. That appointment will create another political fight after the election.
What Happens Now?
There’s as much as $12.4 billion available to be claimed by 9 million families, but there’s a catch. Taking the money connects you to the tax system. Given widespread distrust of government, it’s unknown how many will step up to take the money, whether in the form of a check or tax rebate.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
