The Internal Revenue Service (IRS) has announced it will distribute approximately $2.4 billion in unclaimed COVID-19 stimulus payments to around one million eligible taxpayers by the end of January 2025. These payments are targeted at taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns, which could result in payments of up to $1,400.
IRS Commissioner Danny Werfel stated, “Looking at our internal data, we realized one million taxpayers overlooked claiming this complex credit when they were actually eligible. To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it.”
The payments will be automatically sent either via direct deposit or paper checks. The IRS will issue notifications via letter to those taxpayers eligible to receive the payments. For those who have yet to file their 2021 tax return, they must do so by April 15, 2025, to claim their Recovery Rebate Credit.
Millions of Americans benefited from the COVID economic relief efforts, with the IRS issuing three rounds of Economic Impact Payments (EIPs) during this period. The amounts distributed varied according to individual eligibility, but typically, taxpayers received payments of up to $1,200 for the first round, $600 for the second, and $1,400 for the third.
According to the IRS, these payments are being issued to individuals who filed their 2021 taxes but left the space for the Recovery Rebate Credit blank or claimed it as $0. It is estimated by the agency most eligible taxpayers have already claimed these credits, leaving only those who made administrative errors to receive the upcoming payments.
“These payments are an example of our commitment to go the extra mile for taxpayers,” Werfel added, emphasizing the importance of ensuring everyone receives the financial support meant for them. The IRS hopes to avoid the complicated and often confusing process of amending tax returns for individuals who may not be familiar with the necessary procedures.
The Recovery Rebate Credit was initially intended to help those who may not have received their promised economic relief due to various errors during the filing process. By issuing these additional payments, the IRS aims to address discrepancies and support taxpayers who may have experienced challenges accessing funds during the pandemic.
For many families and individuals, this automatic distribution of funds could provide significant assistance, particularly as economic pressures continue to mount post-pandemic. The IRS expects these payments will arrive by late January 2025, giving hope to those still waiting for what they rightfully should have received earlier.
To summarize the situation, this recent action by the IRS highlights the agency's proactive approach to ensuring equitable payment distribution and addressing outstanding credits left unclaimed by eligible taxpayers. Americans seeking specific details on the eligibility criteria and payment processes can refer to the IRS website, where additional information is readily available.
IRS data indicates taxpayers who earn under $75,000 individually or $150,000 as joint filers were eligible for the original Economic Impact Payments as stated under the COVID-19 relief legislation. Because the government aims to provide support to families and individuals who need it most, ensuring these funds are allocated properly reflects the continuous effort to stabilize financial conditions for many.
While there is apprehension about how many people will actually receive the payments, the IRS is optimistic about its capacities to reach those most affected by the pandemic's economic fallout. The automatic distribution eliminates potential confusion and frustration for taxpayers who didn’t realize they were entitled to the rebates.
“It’s important for taxpayers to know they don’t have to navigate any complicated process to access these payments,” emphasized Werfel, indicating IRS's goal to simplify financial assistance processes. With this announcement, eligible taxpayers can look forward to receiving their much-needed payments without additional burden.
By streamlining this process, the IRS not only alleviates some of the fiscal pressures on American families but also reinforces its commitment to taxpayer service during challenging economic times.
