About 1 million taxpayers will automatically receive special payments of up to $1,400 from the IRS in the coming weeks. The funds will be deposited directly into the bank accounts of eligible individuals or mailed by paper check.
The IRS said it is distributing about $2.4 billion to taxpayers who failed to claim a recovery rebate credit on their 2021 tax returns. People who missed any of the COVID stimulus payments or received less than the full amount could claim the credit. But the IRS said Friday it found many eligible taxpayers had not done so.
“Looking at our internal data, we realized that a million taxpayers had overlooked this complex credit when they actually qualified for it,” IRS Commissioner Danny Werfel said in a statement.
Here’s more about the unexpected money this group of taxpayers will soon receive:
Sorry, it’s probably quite low. The IRS said most taxpayers eligible for the federal stimulus payments, formally known as Economic Impact Payments, have already received them.
The special payments announced by the IRS will be sent to taxpayers who filed a 2021 tax return but left the data field for the Recovery Rebate Credit blank or entered it as $0 when they were actually eligible for the credit .
Eligible taxpayers do not need to take any action. Payments will be made automatically this month and should arrive by direct deposit or check by the end of January 2025. They will be sent to the bank account listed on the taxpayer’s 2023 return or to the address on file with the IRS.
Payments vary, but the maximum amount is $1,400 per person. The IRS has posted information online about eligibility and how the payment was calculated.
IRS plans to send separate letters to eligible taxpayers notifying them of the special payment.
You may still be able to receive the money. However, taxpayers must file a tax return and claim the Recovery Rebate Credit by the April 15, 2025 deadline, even if income from a job, business or other source was minimal or nonexistent, the IRS said.
There were three rounds of payments to households affected by the pandemic, totaling $814 billion. IRS based the amounts taxpayers received on their income, tax filing status and number of children or qualifying dependents.
In March 2020, eligible individuals received up to $1,200 per income tax filer and $500 per child under the CARES Act. In December 2020, eligible individuals received up to $600 per income tax filer and $600 per child under the Consolidated Appropriations Act. In March 2021, eligible individuals received up to $1,400 per income tax filer and $1,400 per child under the American Rescue Plan Act.
