Approximately 1 million taxpayers can expect to receive special payments of up to $1,400 from the IRS in the weeks ahead. These funds will either be directly deposited into the bank accounts of eligible individuals or mailed as paper checks.
The IRS has announced the distribution of around $2.4 billion to those taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax filings. This credit was available for individuals who may have missed any of the COVID-related stimulus payments or received less than the full amount due. Upon reviewing its internal data, the IRS identified many eligible taxpayers who inadvertently overlooked this credit.
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.”
Here’s what to know about these unexpected payments:
What are the chances I will receive a check?
Unfortunately, your chances may be quite slim. Most individuals eligible for these federal stimulus payments, officially known as Economic Impact Payments, have already received them. The special payments are aimed specifically at those taxpayers who filed their 2021 returns but either left the Recovery Rebate Credit field blank or claimed it as $0, despite being eligible.
How will the distribution happen?
There’s no need for eligible taxpayers to take any additional steps. The payments will be processed automatically this month, with direct deposits or checks expected to arrive by late January 2025. Funds will be directed to the bank account detailed on the taxpayer’s 2023 return or sent to the address the IRS has on record.
The payment amounts will vary, but the maximum individual payout will be $1,400. The IRS has made information accessible online regarding eligibility and the calculation of these payments.
Eligible taxpayers will also receive separate notifications from the IRS informing them about the special payment.
What if I haven’t submitted my 2021 tax return yet?
It is still possible for you to receive funds. However, to do so, you must file your tax return and claim the Recovery Rebate Credit by the April 15, 2025 deadline, regardless of your earnings status.
How many rounds of COVID-related stimulus payments were issued?
A total of three stimulus payments were distributed during the pandemic, amassing to around $814 billion. The amounts individuals received were determined based on their income, tax filing status, and the number of children or qualifying dependents.
In March 2020, eligible individuals could receive up to $1,200 per filer and $500 per child under the CARES Act. This was followed in December 2020, when taxpayers received up to $600 per filer and $600 per child through the Consolidated Appropriations Act. Finally, in March 2021, eligible individuals were granted up to $1,400 per filer and $1,400 per child under the American Rescue Plan Act.