The IRS is stepping up its efforts to help taxpayers who inadvertently missed out on claiming financial credits related to the COVID-19 pandemic. The agency has announced it will issue automatic payments of up to $1,400 to approximately one million eligible taxpayers who did not claim the 2021 Recovery Rebate Credit. This initiative, expected to total around $2.4 billion, is set to provide much-needed financial relief to individuals across the country.
This latest round of payments is part of the IRS’s continued efforts to assist those who have struggled financially during the pandemic. Eligible taxpayers will receive these funds without needing to file amended returns, as the payments will be issued automatically by the end of January 2025. The payments could arrive via direct deposit or as paper checks.
According to IRS Commissioner Danny Werfel, "Looking at our internal data, we realized one million taxpayers overlooked claiming this complex credit when they were actually eligible." The Recovery Rebate Credit serves as a refund mechanism for those who missed out on receiving Economic Impact Payments (EIPs) during the pandemic. Individuals who filed their 2021 tax returns but did not fill out the Recovery Rebate Credit field or noted $0 may qualify for these automatic payments.
The IRS will notify eligible taxpayers of their payments by sending them separate letters. This proactive communication aims to assure recipients about the expected payment, making the process more transparent.
For those who have yet to file their 2021 tax returns, there is still hope. The IRS encourages people to file by the April 15, 2025 deadline to potentially access this benefit. Even individuals with minimal or no income can claim the Recovery Rebate Credit, allowing them access to these funds. Missing the chance to claim the credit could mean losing financial support originally intended to help ease the burden of the pandemic.
Since the onset of the pandemic, stimulus payments have provided significant assistance to millions of Americans. The $1,200 checks issued under the CARES Act, the $600 provided through the Consolidated Appropriations Act, and the $1,400 checks from the American Rescue Plan collectively amounted to over $814 billion distributed to U.S. households. Each of these measures aimed to alleviate the economic strains caused by widespread job losses, rising living costs, and the uncertainty brought about by COVID-19.
While no new federal stimulus checks have been announced for 2024, the IRS’s current initiative to distribute these automatic payments highlights its commitment to ensuring eligible taxpayers receive what they are entitled to. These payments should not be considered taxable income when assessing qualifications for other federal benefits such as SSI, SNAP, and WIC, making them even more beneficial to those who meet the eligibility criteria.
Importantly, assistance doesn't merely end with these payments. Various state-level initiatives have emerged, striving to offer additional relief to residents coping with rising inflation and cost of living concerns. For example, California’s Middle-Class Tax Refund has allowed eligible residents to receive up to $1,050, and Maine provided $850 to qualified taxpayers, showing continuous efforts at local levels to assist citizens during challenging economic times.
Tax credits remain another avenue through which families can access financial support. Programs like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) continue to be available to low- and moderate-income families, offering substantial benefits when filing taxes. These credits play an instrumental role as part of broader assistance efforts and can help alleviate financial pressures.
The IRS's approach not only promises immediate financial support through the automatic payments but also seeks to address the obstacles many taxpayers face when claiming credits or deductions. By simplifying the process, the IRS aims to help those who might be unaware of their eligibility or who may struggle with the complexity of tax language.
The prospect of receiving the Recovery Rebate Credit can be reassuring for many taxpayers. By ensuring they can access these funds easily, the IRS is taking significant steps toward fulfilling its role as a responsible and helpful agency during one of the most challenging economic times most Americans have faced.
While the future of federal stimulus payments remains uncertain, the actions taken by the IRS offer some relief, demonstrating the continuous need for support as the nation navigates the economic aftermath of the pandemic.
