This effort aims to provide financial assistance to those who experienced economic difficulties during the pandemic while also ensuring that eligible taxpayers receive the relief to which they are entitled. If you’re wondering if you qualify or how the process works, this article will explain everything in simple terms to help you understand the details.
The Internal Revenue Service (IRS) has announced that nearly one million taxpayers will soon receive stimulus checks worth up to $1,400 each.
These payments are intended for individuals who failed to claim the Recovery Rebate Credit (RRC) on their 2021 tax returns. The IRS launched this initiative to ensure that people eligible for financial assistance during the pandemic receive any funds they may have overlooked or missed.
The IRS estimates that these payments will total $2.4 billion. The funds will be distributed automatically, so taxpayers will not need to take any action. Payments will be made either as direct deposits to the IRS’s bank accounts on file or as paper checks mailed to mailing addresses already registered with the IRS.
What Are These Stimulus Payments?
The Internal Revenue Service (IRS) is sending stimulus payments to ensure that individuals who did not receive previous financial assistance during the COVID-19 pandemic receive their due.
These payments are intended for individuals who were eligible for Economic Impact Payments but failed to claim the corresponding Recovery Rebate Credit on their 2021 tax returns.
The Recovery Rebate Credit allowed taxpayers to claim any missed or incomplete stimulus payments on their tax returns. Unfortunately, many people left this section of their tax returns blank or filled it out incorrectly, often believing they were ineligible. To address this issue, the IRS will now issue these payments automatically.
Who Is Eligible for these Payments?
- Filed a 2021 Tax Return- To qualify, an individual must have submitted a tax return for the 2021 tax year. This return serves as the basis for determining whether someone missed claiming the Recovery Rebate Credit.
- Missed Claiming the Recovery Rebate Credit (RRC)- The special payments are aimed at taxpayers who made one of two common mistakes on their 2021 tax return:
- They left the Recovery Rebate Credit section blank.
- They filled out the section as $0 despite being eligible for a credit.
- These errors frequently occurred because taxpayers did not fully understand their eligibility or the process for claiming the credit.
- Eligible for Economic Impact Payments (EIPs)- Individuals must have been eligible for at least one of the three rounds of Economic Impact Payments (EIPs) that were distributed during the pandemic. If they missed claiming these payments or received less than they were entitled to, they qualify for this special correction.
How Much Will Eligible Individuals Receive?
The maximum payment is $1,400 per individual. However, the exact amount will vary based on several factors:
- The total amount of stimulus payments already received in the earlier rounds.
- The individual’s income, tax filing status, and number of dependents in 2021.
- A single taxpayer who did not receive any of the earlier stimulus payments may be eligible for the full $1,400.
- A family of four (two parents and two children) that missed claiming their credits could potentially receive up to $5,600 ($1,400 per family member)
How Will the IRS Send the Payments?
The IRS has automated the process of distributing these special payments, so eligible taxpayers are not required to take any action. Here’s how the payments will be processed:
Automatic Payments
Delivery Methods
- Direct Deposit: Payments will be deposited into the bank account linked to the taxpayer’s most recent tax return, such as the one filed for 2023.
- Paper Checks: If no bank account is on file, a paper check will be mailed to the address the IRS has on record. Taxpayers should ensure their address is updated to avoid delays.
Notification Letters
The IRS will send recipients a letter detailing the payment, including the amount and how it was calculated. These letters should be saved for future reference.
Timeline for Delivery
Payments are expected to arrive in late January 2025. Taxpayers should check their bank accounts or mailboxes and notify the IRS if there are any delays.
Steps to Take If You Are Eligible
- Verify Your 2021 Tax Return: Check if you left the Recovery Rebate Credit field blank or filled it incorrectly.
- File Your Tax Return (If Unfiled): Submit your 2021 tax return before the April 15, 2025, deadline to claim the credit.
- Update Your Information: Ensure your mailing address and bank account details are current with the IRS to avoid payment delays.
What If You Haven’t Filed Your 2021 Tax Return?
Taxpayers who have not yet filed their 2021 tax returns still have the opportunity to claim the Recovery Rebate Credit and potentially receive a special payment from the IRS. To take advantage of this opportunity, the IRS has set an April 15, 2025 deadline for filing 2021 tax returns.
This deadline allows individuals plenty of time to file their returns, but it is critical to act quickly to ensure eligibility for the payment. Importantly, this also applies to people who had little or no income in 2021.
Whether someone earned income from a job, a small business, or other sources—or had no earnings at all—they may still be eligible for this financial benefit simply by filing the required tax return.
Those who believe they may be eligible should carefully review their situation and file any necessary paperwork as soon as possible. Filing a 2021 return could result in a payment of up to $1,400, depending on your specific circumstances.
Overview of COVID-19 Stimulus Payments
To better understand the importance of these payments, consider the three rounds of stimulus payments made during the pandemic:
| Stimulus Round | Amount Per Individual | Amount Per Dependent | Legislation |
|---|---|---|---|
| Round 1 (March 2020) | Up to $1,200 | $500 per qualifying child | CARES Act |
| Round 2 (December 2020) | Up to $600 | $600 per qualifying child | Consolidated Appropriations Act |
| Round 3 (March 2021) | Up to $1,400 | $1,400 per qualifying child | American Rescue Plan Act |
These three rounds totaled $814 billion in payments, providing much-needed financial assistance to households at the peak of the pandemic.
Why Is the IRS Sending These Payments Now?
The IRS is sending these payments to assist people who were unable to receive benefits due to the pandemic. According to IRS Commissioner Danny Werfel, approximately one million taxpayers failed to claim the Recovery Rebate Credit on their 2021 tax returns due to the complexity of the process. Many people left this section blank or filled it out incorrectly.
To address this issue, the IRS reviewed its data and identified those who were eligible but did not receive the credit. They are now automatically sending payments to ensure that everyone receives the financial support they deserve. Commissioner Werfel stated, “We discovered that one million taxpayers failed to claim this complex credit when they were actually eligible.”
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