The IRS is set to distribute special payments of up to $1,400 to approximately 1 million taxpayers in the coming weeks. This unexpected cash will be directly deposited into eligible individuals’ bank accounts or sent via a paper check.
The reason behind these payments is that the IRS identified that many taxpayers failed to claim a Recovery Rebate Credit on their 2021 tax returns. This credit was available to those who missed out on one of the COVID stimulus payments or received less than the full amount. IRS Commissioner Danny Werfel stated that they discovered one million taxpayers who were eligible for the credit but did not claim it.
It is important to note that the likelihood of receiving a check is low, as most taxpayers who were eligible for the stimulus payments have already received them. The special payments will be sent to those who filed a 2021 tax return but left the field for the Recovery Rebate Credit blank or entered $0 when they were actually eligible.
Eligible taxpayers do not need to take any action to receive the payment. The funds will be automatically sent out this month and should arrive by late January 2025. The amount of the payment will vary, with the maximum being $1,400 per individual. The IRS has provided information online about eligibility and how the payment was calculated.
If you have not yet filed your 2021 tax return, there is still a chance to receive the payment. Taxpayers must file a return and claim the Recovery Rebate Credit by the April 15, 2025 deadline. This applies even if there was minimal or no income from a job, business, or other sources.
Overall, there were three rounds of COVID stimulus payments totaling $814 billion distributed to households impacted by the pandemic. The amounts varied based on income, tax filing status, and the number of children or qualifying dependents. The payments were dispersed in March 2020, December 2020, and March 2021 under different acts.
In conclusion, the upcoming special payments from the IRS serve as a reminder for taxpayers to ensure they are claiming all available credits and benefits when filing their tax returns.
