The IRS has announced it will automatically distribute up to $1,400 to approximately one million eligible taxpayers who failed to claim their full benefits from the COVID-19 relief payments back in 2021. This unexpected financial windfall, totaling around $2.4 billion, will be directly deposited or sent via paper checks starting this month. Many of these taxpayers missed out on the Recovery Rebate Credit, which was available to those who experienced financial hardships during the pandemic but did not file for the credit on their 2021 tax returns.
According to IRS Commissioner Danny Werfel, the agency's internal research revealed, "Looking at our internal data, we realized one million taxpayers overlooked claiming this complex credit when they were actually eligible." The checks will be automatically distributed to those who, when filing their 2021 returns, either left the Recovery Rebate Credit field blank or indicated the amount as $0, even though they were eligible.
Most taxpayers who were eligible for the Economic Impact Payments—the formal name for these stimulus checks—have already received them. This special distribution is aimed at ensuring those who missed their payments are not left out. Eligible taxpayers do not need to take any action to receive these payments; they will arrive based on the filing information from their 2023 tax return or at the address the IRS has on file.
Payments will vary for each individual based on their prior claims, but the maximum amount is set at $1,400. Werfel emphasized the IRS's effort to ease the burden on those needing assistance, saying, "We want to make sure this money gets to the people who need it without unnecessary hassle." These payments are also intended to arrive before the end of January 2025, potentially offering some relief just as families prepare for the new year.
For those who haven’t filed their 2021 taxes yet, there’s still hope. The IRS states you can still qualify for this payment by filing your tax return and claiming the Recovery Rebate Credit by the April 15, 2025 deadline. This is especially significant for individuals with minimal or no income during the pandemic, as they too may be eligible for this much-needed financial aid.
The COVID-19 pandemic prompted several rounds of direct payments to households, with the total totaling about $814 billion. Eligible individuals received varying amounts dependent on their income, filing status, and the number of dependents. The distribution of these funds played a significant role in stabilizing American families during the economic upheaval.
Taxpayers shouldn't overlook these payments, as they could help alleviate financial pressures. Whether it’s for bills, groceries, or holiday shopping, the arrival of $1,400 can provide relief during uncertain financial times. For those concerned their payment may be delayed or rejected, don't worry: if there are issues with direct deposits due to changed bank accounts, the IRS will simply issue checks mailed to the address on file, ensuring taxpayers receive their due assistance.
This automatic distribution reflects the IRS's commitment to ensuring all eligible taxpayers can receive the benefits intended for them—without burdening them with additional paperwork. After all, the aim here is straightforward: to assure every person gets the financial support they need during one of the most challenging economic times.
This initiative serves as a reminder for anyone who may have missed out on claiming prior credits to stay vigilant. Claiming the Recovery Rebate Credit could mean the difference between financial security and uncertainty. For many Americans, these payments might just be the lifeline they need as they navigate through financial challenges brought on by recent crises.
