The Internal Revenue Service (IRS) is set to provide around $2.4 billion in payments to taxpayers who missed out on COVID-19 stimulus payments. By the conclusion of January, it is estimated that roughly 1 million taxpayers will receive these special payments, potentially amounting to $1,400 each from the IRS.
The agency clarified that these payments are aimed at those taxpayers who did not claim a Recovery Rebate Credit on their tax returns for the year 2021. This particular credit is refundable and was established for individuals who failed to receive one or more of the Economic Impact Payments (EIP), commonly referred to as stimulus payments.
IRS Commissioner Danny Werfel noted in a statement, “Our internal analysis revealed that a million taxpayers neglected to claim this intricate credit despite being eligible.”
One individual who reaped the benefits of this announcement is 61-year-old Ginny Bultman from Colorado. In 2021, she and her husband did not receive a stimulus payment. Following the news about the IRS’s recent disbursement, Bultman discovered she qualified for the Recovery Rebate Credit. She received her check in the mail just a day later. “It was quite the delightful surprise,” said Bultman, who runs a locksmith business locally.
The Bultman family ultimately received three overdue stimulus payments, including one for their minor son, totaling $4,200 by late December.
Here are key details regarding the IRS payments:
**Who qualifies for a check?**
The special payments are designated for taxpayers who submitted a 2021 tax return but left the Recovery Rebate Credit field blank or indicated it as $0 despite being eligible for the credit.
**What will eligible taxpayers receive?**
The payment amounts will differ, with a maximum cap of $1,400 for each individual. Overall, the IRS is distributing approximately $2.4 billion to those who did not claim the Recovery Rebate Credit in their 2021 tax returns.
The IRS has made additional information about eligibility and payment calculations available online.
**Why are these stimulus checks being issued?**
The Recovery Rebate Credit serves as a refundable credit for those who did not obtain Economic Impact Payments during the years 2020 and 2021. Following a review of internal data, the IRS identified that numerous eligible taxpayers who completed their 2021 tax returns overlooked claiming this credit.
“In order to alleviate complications and ensure eligible taxpayers receive this money, we are making these payments automatic. This means that individuals will not be obliged to file an amended return to collect it,” commented Werfel.
**How will I receive my stimulus payment if I’m qualified?**
Taxpayers eligible for the Recovery Rebate Credit do not need to take any further action. The IRS intends to send letters to eligible individuals informing them about the special payment. These payments are expected to be dispatched automatically within this month, arriving via direct deposit or check by the end of January. Funds will be sent to the bank account indicated on the taxpayer’s 2023 return or to the address currently on file with the IRS.
**What if I haven’t filed my 2021 tax return yet?**
There is still a possibility for you to receive payment. However, taxpayers must submit a tax return and claim the Recovery Rebate Credit by the deadline of April 15, 2025, even if their income from any work, business, or other sources is minimal or nonexistent, according to IRS guidelines.
**How many rounds of COVID stimulus payments were administered?**
There were a total of three stimulus payment rounds distributed to households affected by the pandemic, summing up to $814 billion. Payments received by taxpayers were determined based on their income, tax filing status, and the number of children or qualifying dependents they had.
Initially, in March 2020, qualifying individuals received up to $1,200 each and $500 per child under the CARES Act. Subsequently, in December 2020, qualifying adults received up to $600 each and $600 per child through the Consolidated Appropriations Act. The final round in March 2021 allowed eligible individuals to obtain up to $1,400 each and $1,400 per child under the American Rescue Plan Act.
