U.S. taxpayers who have yet to file their 2021 tax returns may have an unexpected opportunity to receive some financial relief, as the Internal Revenue Service (IRS) begins distributing automatic stimulus payments designed to assist individuals who failed to claim the Recovery Rebate Credit (RRC). With a total of approximately $2.4 billion allocated for this initiative, eligible taxpayers can receive a stimulus check of up to $1,400, but time is running out to act.
The IRS's decision to issue these payments comes after a review of internal data revealed that many eligible individuals overlooked the RRC on their 2021 tax returns. As IRS Commissioner Danny Werfel stated, "Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible." The RRC serves as a refundable credit for individuals who did not receive one or more Economic Impact Payments during the pandemic, commonly referred to as stimulus checks.
Taxpayers who filed a 2021 tax return but left the RRC section blank or entered $0 could still qualify for a stimulus payment. Additionally, those who have not yet filed their 2021 tax returns can also claim the RRC, but they must meet the April 15, 2025, deadline for filing. If they do, they can receive the applicable amount, which has its maximum set at $1,400 per individual.
It's important to note that the IRS began issuing these payments automatically in December 2024. Individuals who qualify will receive notification letters regarding the payment, which will either be direct deposited into their bank accounts or sent as a paper check, depending on the payment method indicated on their previously filed tax returns. Werfel emphasized, "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.”
For individuals who have already filed their 2021 tax return, no additional actions are necessary to receive the payment. They can easily check if they claimed the Recovery Rebate Credit by reviewing their tax documents for any blank fields or incorrect entries. Meanwhile, for those who haven't yet filed, it is crucial to take the necessary steps promptly to ensure eligibility.
The context for these payments lies in the three rounds of COVID-related stimulus distributions—which totaled $814 billion—administered from March 2020 through March 2021. The amounts received by taxpayers were determined based on income, tax filing status, and the number of dependents. The first round, under the CARES Act, provided up to $1,200 per eligible individual, with subsequent payments of $600 and $1,400 under later legislative acts.
Statistics show that about 1.1 million Americans have yet to file their 2021 return, leaving more than $1 billion in potential refunds unclaimed. This translates to a median refund of $781—meaning half of the recipients' refunds will be more than this amount. The circumstance is similarly pressing for New York residents, where it is estimated that about 73,000 failed to file their 2021 returns, resulting in unclaimed refunds exceeding $72 million, with the median refund amount at $995.
Current regulations stipulate that in order to qualify for the Recovery Rebate Credit and any other potential refunds, taxpayers need to file returns for 2022 and 2023 as well. Failure to do so may result in delays or forfeitures of owed refunds.
As the deadline approaches, taxpayers are reminded to act promptly in filing their 2021 tax returns to ensure receipt of any financial relief. The IRS provides several resources, including its Free File program, which offers free services for preparing and electronically submitting tax returns. Filing electronically and opting for direct deposit is the quickest way for individuals to receive their refunds.
The Recovery Rebate Credit represents a vital financial support mechanism for many Americans still facing economic challenges stemming from the COVID-19 pandemic. As noted by Werfel, the agency's ongoing adjustments reflect its commitment to ensuring that citizens receive the benefits they are entitled to. As the April 15, 2025 deadline looms, eligible taxpayers should seize this opportunity to secure any financial assistance they can claim.
