The IRS has announced that approximately one million taxpayers will soon receive special payments amounting to up to $1,400. These payments are part of a broader effort to address overlooked Recovery Rebate Credits from 2021 tax returns.
The Internal Revenue Service (IRS) is set to distribute about $2.4 billion to taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns. This omission occurred when individuals missed out on one of the COVID-19 stimulus payments or received less than the full amount.
According to IRS Commissioner Danny Werfel, internal data reviews revealed that many eligible taxpayers failed to claim this credit. “Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” Werfel stated.
The IRS’s initiative targets taxpayers who, while eligible for the federal stimulus payments—also known as Economic Impact Payments—did not reflect this in their filed returns. As a result, these taxpayers will receive payments automatically without any required action on their part. These payments will be issued via direct deposit or mailed checks and should be expected by late January 2025.
Despite the automatic distribution, the likelihood of receiving such a payment is relatively low for most taxpayers, as the IRS has confirmed that a majority who qualified have already received their due stimulus payments. However, for those who filed a 2021 tax return with a blank or zero value in the Recovery Rebate Credit field, this presents a valuable opportunity.
Eligible recipients need to ensure that their bank account details or mailing address are up-to-date with the IRS, particularly as these payments will be sent based on the information provided in their 2023 returns.
For individuals who have not yet filed their 2021 returns but may be eligible, there remains a window to claim the Recovery Rebate Credit. It is crucial for these individuals to file by the April 15, 2025 deadline, even in cases of minimal or non-existent income during that tax year.
These measures come after three rounds of COVID stimulus payments, which collectively totaled $814 billion. The amounts taxpayers received were determined based on their income, tax status, and the number of dependents.
In previous rounds, the CARES Act provided up to $1,200 per filer and $500 per child in March 2020, followed by $600 per filer and per child in December 2020 under the Consolidated Appropriations Act, and up to $1,400 per filer and per child in March 2021 through the American Rescue Plan Act.
The IRS’s distribution of these special payments underscores the importance of accurately filing tax information to avoid missing out on potential credits. Eligible taxpayers are encouraged to review their filing status and make any necessary updates or corrections before the upcoming deadlines.
Source: Nbcmiami
