Approximately 1 million taxpayers are set to receive special payments of up to $1,400 from the IRS in the coming weeks. These payments will either be directly deposited into eligible individuals’ bank accounts or sent via mail in the form of a paper check.
The IRS has announced that it will be distributing around $2.4 billion to taxpayers who did not claim a Recovery Rebate Credit on their 2021 tax returns. This credit allowed individuals who missed out on one of the COVID stimulus payments or received less than the full amount to claim the credit. The IRS Commissioner, Danny Werfel, stated that after analyzing internal data, it was discovered that a significant number of eligible taxpayers had overlooked claiming this credit.
Regarding the likelihood of receiving a check, it is stated that it is relatively low as most taxpayers who were eligible for the federal stimulus payments have already received them. The special payments that are now being distributed are specifically for those taxpayers who filed a 2021 tax return but either left the data field for the Recovery Rebate Credit blank or incorrectly filled it out as $0 despite being eligible for the credit.
Eligible taxpayers need not take any action to receive these payments as they will be automatically processed and sent out this month, with an estimated arrival by late January 2025. The payments will either be deposited into the bank account listed on the taxpayer’s 2023 return or sent to the address the IRS has on file. The amounts of these payments may vary, but the maximum will be $1,400 per individual. The IRS has provided detailed information online regarding eligibility requirements and how the payment amounts were calculated. In addition, the IRS plans to send separate letters to eligible taxpayers to notify them of the special payment.
For individuals who have not yet filed their 2021 tax return, there is still a chance to receive the special payment. However, taxpayers must file a tax return and claim the Recovery Rebate Credit by the deadline of April 15, 2025, even if their income from employment, business, or other sources was minimal or non-existent.
In total, there were three rounds of COVID stimulus payments distributed to households impacted by the pandemic, amounting to $814 billion. The amounts received by taxpayers were based on their income, tax filing status, and the number of children or qualifying dependents. The first round of payments, under the CARES Act in March 2020, provided eligible individuals with up to $1,200 per income tax filer and $500 per child. The second round, in December 2020 under the Consolidated Appropriations Act, provided eligible individuals with up to $600 per income tax filer and $600 per child. The third round, in March 2021 under the American Rescue Plan Act, provided eligible individuals with up to $1,400 per income tax filer and $1,400 per child.
