The IRS will be sending special payments to taxpayers who did not claim their 2021 Recovery Rebate Credit!
The IRS has announced its plan of automatically sending special payments of up to $1,400 to 1 million taxpayers starting later this month. In total, about $2.4 billion in payments will be distributed. These payments are for individuals who did not claim the 2021 Recovery Rebate Credit on their tax returns but qualify for it, which is a refundable tax credit for those who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments, issued by the federal government during the Covid-19 pandemic.
“The IRS continues to work hard to make improvements and help taxpayers. These payments are an example of our commitment to go the extra mile for taxpayers. Looking at our internal data, we realized that 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”, said IRS Commissioner Danny Werfel.
How Will The Automatic Payments Work?
These payments will be sent out automatically starting in December, with most arriving by late January 2025. Eligible individuals will receive the money through direct deposit sent to the bank account listed on the taxpayer’s 2023 tax return or to the address of record.
A separate notification letter will also be sent to those who will be receiving the payment. If a taxpayer has closed their bank account since filing their 2023 tax return, they don’t need to take any action. The bank will return the payment to the IRS and the refund will be reissued to the address of record.
How To Know If You Qualify
The payments are specifically for taxpayers eligible for the 2021 Recovery Rebate Credit who did not claim it on their 2021 tax return. This includes individuals who left the Recovery Rebate Credit field blank or entered $0 despite being eligible. If you haven’t filed a 2021 tax return yet, you still have time to claim the credit. The deadline to file and qualify for the credit or any other refunds is April 15, 2025.
The Recovery Rebate Credit you’ll receive does not count as income. It will not impact eligibility for federal assistance programs like Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).