According to an announcement made last week, the IRS will begin issuing automatic special payments of up to $1,400 to one million taxpayers later this month.
People who are entitled for the money but did not claim the 2021 Recovery Rebate Credit on their tax returns for that year would get the payouts.
People who did not receive one or more economic impact payments—also referred to as stimulus checks—that were delivered by the federal government in the wake of the COVID-19 outbreak are eligible for the Recovery Rebate Credit, a refundable tax credit.
According to the IRS, the maximum payout will be $1,400 per person and will change depending on the situation. An estimated $2.4 billion will be paid by the agency overall.
In a statement, IRS Commissioner Danny Werfel stated, “After reviewing our internal data, we discovered that one million taxpayers failed to claim this complex credit when they were truly qualified.” We are making these payments automatic in order to reduce hassles and ensure that eligible taxpayers receive the money without having to go through the laborious process of filing an amended return.
No action needed for eligible taxpayers
The new payments are slated to be sent out automatically in December. According to the IRS, the funds should typically arrive by the end of January.
The funds will be sent to eligible taxpayers in the form of a paper check or direct deposit. A supplementary letter informing them of the payment will also be sent to them.
Direct deposit payments will go to taxpayers who have current bank account information on file with the IRS.
The IRS will reissue payments to the mailing addresses on file in the form of paper checks if eligible persons have closed their bank accounts since filing their 2023 tax returns. The agency says such taxpayers don’t have to do anything.
How to tell if you qualify
Only those taxpayers who are eligible for the 2021 Recovery Rebate Credit will get the payouts, especially those who filed a 2021 tax return but failed to claim the credit despite being eligible, either by entering 0 or leaving that data field empty.
The benefit is still available to taxpayers who have not yet submitted their 2021 tax forms. To get the credit and any further reimbursements they are entitled to, customers must submit their application by April 15, 2025.
In addition to not counting as income, claiming the Recovery Rebate Credit will also affect your eligibility for some other federal benefits, such as Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), the Supplemental Nutrition Assistance Program (SNAP), and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
On its website, the IRS offers more details about payment eligibility and amounts.
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