Around 1 million taxpayers will soon receive unexpected payments of up to $1,400 from the IRS. These funds, distributed via direct deposit or mailed paper checks, will be sent automatically in the coming weeks.
The IRS is distributing approximately $2.4 billion to taxpayers who overlooked claiming the Recovery Rebate Credit on their 2021 tax returns. This credit was available to individuals who either missed out on one of the COVID-19 stimulus payments or received less than the full amount they were eligible for.
“We identified about one million taxpayers who missed claiming this complex credit despite being eligible,” stated IRS Commissioner Danny Werfel.
Here’s a breakdown of the program and what it means for taxpayers:
Who Will Receive the Payments?
The likelihood of receiving this payment is relatively low, as most eligible taxpayers have already claimed their federal stimulus payments. These new payments are for those who filed a 2021 tax return but left the Recovery Rebate Credit section blank or incorrectly entered $0 when they qualified for the credit.
How Will the Payments Be Sent?
Taxpayers don’t need to take any action. Payments will be sent automatically and should arrive by late January 2025, either through direct deposit or as a paper check. 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.
The maximum payment is $1,400 per individual, but amounts may vary. Eligible taxpayers will also receive a notification letter explaining the payment details.
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What If I Haven’t Filed My 2021 Tax Return?
You might still qualify for the payment if you file a tax return by the April 15, 2025, deadline and claim the Recovery Rebate Credit. This applies even if you had little to no income to report for 2021.
A Recap of COVID-19 Stimulus Payments
The federal government issued three rounds of Economic Impact Payments during the pandemic, totaling $814 billion.
- March 2020 (CARES Act): Up to $1,200 per filer and $500 per dependent 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.
The amounts received were based on income, tax filing status, and the number of qualifying dependents.
For more details on eligibility and how the payments are calculated, the IRS has made resources available online.