Why You Might Be About To Receive an Unexpected Stimulus Check
Written by
Jennifer Taylor
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Approximately 1 million taxpayers are about to get a pleasant surprise from the IRS. Instead of owing money, they’ll automatically receive a special payment of up to $1,400.
You might be part of this group if you didn’t claim the Recovery Rebate Credit on your 2021 tax return. This is a refundable credit for taxpayers who didn’t receive one or more Economic Impact Payments — i.e., stimulus payments.
Even better news: If you’re eligible for this payment, it will be automatically direct deposited into your bank account or sent by paper check.
Keep reading to learn more about who is entitled to this payment and why they’re receiving it.
2021 Recovery Rebate Credit Eligibility
Don’t get too excited: Most eligible taxpayers have already received their funds. However, if you’re a qualified taxpayer who filed a 2021 tax return, but left the Recovery Rebate Credit section blank or filled out $0 when you were eligible for the credit, you might be entitled to this special payment.
Either way, you won’t have to wait long to find out. Those eligible should receive their payment by late January 2025.
Additionally, if you haven’t filed your 2021 tax returns, you could still be eligible for this payment. You’ll need to file and claim the Recovery Rebate Credit by April 15, 2025.
3 Smart Ways To Spend Your Unexpected Stimulus Check
Getting an unexpected financial windfall is exciting. It can be tempting to spend the cash on things like a fancy night out, shopping spree or a weekend getaway.
While enjoyable in the moment, these purchases might not be the most financially responsible move. Instead, consider brightening your future by taking one of the following three routes:
Pay Down High-Interest Debt
If you have high-interest debt — i.e., credit cards — you could be paying around 18% or more in interest fees by not settling your balance in full each month. Having to pay interest, in addition to the principal balance, each month can create an expensive cycle that puts you in debt for years to come.
Putting any extra money you receive from the IRS toward this debt can allow you to pay it off faster. Over time, this may allow you to save hundreds or even thousands of dollars in interest.
Start an Emergency Fund
If you don’t currently have an emergency fund — or the one you have isn’t fully funded — consider using your extra IRS payment to create one.
This will provide you with money to fall back on if you’re faced with an unexpected financial emergency, such as car repair, job loss or medical bills.
Generally speaking, experts recommend having three to six months of living expenses in your emergency fund. This payment likely won’t be enough to cover that, but it can serve as a solid start.
Invest It
Cash in on the power of compound interest by investing your money. This allows you to earn interest on both the money you save and your earned interest.
You can open a variety of accounts to start taking advantage of compound interest. Some of these include a high-yield savings account, certificate of deposit (CD) money market account, and bonds.
More From GOBankingRates
