Just ahead of the holiday season, the Internal Revenue Service (IRS) revealed plans to automatically distribute payments to approximately 1 million qualifying taxpayers who did not claim the 2021 Recovery Rebate Credit. This measure specifically aids individuals who missed one or more Economic Impact Payments, known widely as stimulus payments.
Depending on income levels, the maximum possible payment a taxpayer can receive is $1,400. This scales up for families, enabling a qualifying married couple to potentially receive up to $2,800, and a family comprising four members to receive up to $5,600.
Fortunately, eligible taxpayers don't need to fret over filling out forms to receive this financial aid, the IRS will automatically distribute the eligible amount to those it has identified as unclaimed credit recipients. The payments are expected to be made this month, either via a mailed cheque or direct deposit.
However, there remains a group that needs to take further action to access their credit payment. Those who left their 2021 tax return unfiled will not be eligible for payment. But good news follows. By filing the return by April 15, 2022, individuals can remain eligible for the stimulus payment.
Currently, banks and credit unions are providing nearly the highest rates in the past 20 years, making it an opportune time to stash away cash. High-yield savings accounts, money market accounts, and certificate of deposit (CD) represent three secure, uncomplicated options to stretch your stimulus payment.
High-yield savings accounts allow the deposit and withdrawal of money at will. Insured federally by the FDIC for banks or the NCUA for credit unions, they are a safer option for securing your deposits up to $250,000 per person and per institution. A Money market account adds the feature of writing paper checks, alongside all other benefits of a savings account, whereas, a CD could yield a higher return through fixed APY.
Choosing wisely amongst these options and investing your stimulus can lead to a considerably greater sum of money, particularly under current elevated rate conditions. By redirecting your stimulus payment into a CD, high-yield savings, or a money market account, your funds can garner substantial returns that can be utilized down the line. This enhances the maximizing potential of your stimulus payments.