IRS to Distribute Up to $1,400 to 1 Million Taxpayers: Who’s Eligible and Why Now?
In the coming weeks, approximately 1 million taxpayers will automatically receive special payments of up to $1,400 from the IRS. These payments will be directly deposited into eligible taxpayers’ bank accounts or sent via paper checks in the mail.
The IRS announced that it is distributing roughly $2.4 billion to individuals who missed claiming the Recovery Rebate Credit on their 2021 tax returns. This credit was designed to provide additional relief to people who either missed one of the COVID-19 stimulus payments or received less than the full amount. The IRS discovered that many eligible taxpayers failed to claim the credit when filing their returns.
IRS Commissioner Danny Werfel stated, “Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible.”
Who Will Receive the Special Payments?
If you are wondering whether you’ll receive a check, the odds are not in your favor. The IRS noted that most taxpayers eligible for the Economic Impact Payments (EIPs), also known as federal stimulus payments, have already received them.
These special payments will go to taxpayers who filed a 2021 return but either left the Recovery Rebate Credit section blank or mistakenly filled it in as $0 despite being eligible. The IRS is now correcting these missed credits and sending payments to those who overlooked them.
How Will the Payments Work?
Eligible taxpayers don’t need to take any action. The IRS will automatically issue the payments in late January 2025. If you are eligible, the funds will be sent directly to the bank account listed on your 2023 tax return or the address the IRS has on file for you.
The payments will vary in amount, but the maximum payment per individual will be $1,400. The IRS has posted detailed information online to help taxpayers understand eligibility and how the payment amount was determined.
What if I Haven’t Filed My 2021 Tax Return Yet?
If you haven’t filed your 2021 tax return yet, you still have time to claim the Recovery Rebate Credit. To be eligible, you must file your tax return and claim the credit by April 15, 2025—even if your income was minimal or nonexistent.
How Many Rounds of Stimulus Payments Were There?
During the pandemic, there were three rounds of stimulus payments, totaling $814 billion in relief to households. The IRS based the payment amounts on income, tax filing status, and the number of dependents.
Here’s a breakdown of the three rounds:
- March 2020 – Up to $1,200 per tax filer and $500 per child under the CARES Act.
- December 2020 – Up to $600 per tax filer and $600 per child under the Consolidated Appropriations Act.
- March 2021 – Up to $1,400 per tax filer and $1,400 per child under the American Rescue Plan Act.
Conclusion
If you missed out on the Recovery Rebate Credit in 2021, the IRS is now taking steps to correct that oversight, sending out payments to eligible taxpayers. While most people have already received their stimulus checks, this latest distribution targets those who were eligible but failed to claim the credit. If you’re among them, expect the IRS to send your payment automatically by the end of January 2025, without any need for action on your part.
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