Around 1 million taxpayers are set to receive special payments of up to $1,400 from the IRS in the coming weeks. These payments will either be directly deposited into bank accounts or sent via paper checks through the mail.
The IRS is distributing approximately $2.4 billion to taxpayers who missed claiming the Recovery Rebate Credit on their 2021 tax returns. This credit was available to those who either didn’t receive a COVID stimulus payment or received less than the full amount. However, the IRS recently found that many eligible taxpayers failed to claim the credit.
“After reviewing our internal data, we found that one million taxpayers missed out on claiming this complicated credit despite being eligible,” said IRS Commissioner Danny Werfel in a statement.
Here’s what you need to know about this unexpected payment:
Am I likely to receive a check?
Chances are slim. The IRS confirmed that most taxpayers eligible for the Economic Impact Payments, commonly known as federal stimulus payments, have already received them.
These newly announced payments will go to taxpayers who filed a 2021 tax return but either left the Recovery Rebate Credit field blank or entered $0 despite being eligible for the credit.
How will the payments be distributed?
Eligible taxpayers don’t need to take any action. The payments will be sent automatically this month, arriving via direct deposit or check by late January 2025. Funds will be deposited into the bank account listed on the taxpayer’s 2023 return or mailed to the address the IRS has on file.
Payments will vary, but the maximum amount per individual is $1,400. The IRS has provided online resources detailing eligibility and how the payment is calculated. Additionally, separate letters will be sent to notify eligible taxpayers about their payments.
What if I haven’t filed my 2021 tax return?
You could still qualify for the payment. To receive it, taxpayers must file a return and claim the Recovery Rebate Credit by the April 15, 2025 deadline. This applies even if they had minimal or no income to report.
How many COVID stimulus payments were issued?
There were three rounds of payments during the pandemic, totaling $814 billion. Payment amounts were based on income, filing status, and the number of children or dependents.
- March 2020 (CARES Act): Up to $1,200 per filer and $500 per child.
- December 2020 (Consolidated Appropriations Act): Up to $600 per filer and $600 per child.
- March 2021 (American Rescue Plan Act): Up to $1,400 per filer and $1,400 per child.
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