About 1 million taxpayers will automatically receive special payments of up to $1,400 from the IRS in the coming weeks. Money will be deposited directly into eligible people’s bank accounts or mailed with a paper check.
The IRS said it distributed about $2.4 billion to taxpayers who failed to claim the Recovery Allowance Credit on their 2021 tax returns. People who missed one of the COVID stimulus payments or received less than the full amount were able to claim a loan. But on Friday, the IRS said it had discovered that many eligible taxpayers did not.
“Looking at our internal data, we realized that over a million taxpayers neglected to claim this complex credit when they were actually eligible,” said IRS Commissioner Danny Werfel.
Here’s more about the windfall this group of taxpayers will soon receive:
What are my chances of receiving a check?
Sorry, too little. The IRS said most taxpayers eligible for federal stimulus payments, officially known as Economic Impact Payments, have already received them.
Special payments announced by the IRS are being sent to taxpayers who file their 2021 tax return but leave the Recovery Relief Credit information field blank or fill it in as $0 when they actually qualify for the credit.
How will this work?
Eligible taxpayers need not take any action. Payments will go out automatically this month and should be delivered 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 the IRS has on file.
Fees will vary, but the maximum amount will be $1,400 per person. The IRS has posted information online about eligibility and how payment is calculated.
The IRS plans to send separate letters to eligible taxpayers informing them of the special payment.
What if I haven’t filed my 2021 tax return yet?
You can still get the money. However, according to the IRS, taxpayers must file a tax return and claim the Recovery Allowance Credit by April 15, 2025, even if any income from a job, business or other source is minimal or non-existent.
How many cycles of COVID stimulus payments were there?
Three rounds of payments to households affected by the pandemic totaled $814 billion. The amounts taxpayers receive from the IRS are based on their income, the status of their tax returns, and the number of children or eligible dependents they have.
In March 2020, eligible individuals received up to $1,200 per income taxpayer and $500 per child under the CARES Act. In December 2020, eligible individuals received up to $600 per income taxpayer and $600 per child under the Consolidated Appropriations Act. In March 2021, eligible individuals received $1,400 for an income taxpayer and $1,400 for a child under the American Rescue Plan Act.
