The IRS is distributing a total of approximately $2.4 billion to taxpayers who missed out on their COVID stimulus payments. By the end of January, around 1 million taxpayers will receive special payments of up to $1,400.
The payments are being sent to individuals who filed a 2021 tax return but failed to claim the Recovery Rebate Credit, a refundable credit for those who did not receive all or part of their Economic Impact Payments (EIP), commonly known as stimulus payments.
IRS Commissioner Danny Werfel explained, “After reviewing our internal data, we discovered that one million taxpayers had overlooked claiming the Recovery Rebate Credit, even though they were eligible.”
Among those receiving payments is Ginny Bultman, 61, from Colorado. Bultman and her husband never received a stimulus payment in 2021. After learning about the IRS initiative, she realized she qualified for the Recovery Rebate Credit. Just a day later, she received a check in the mail.
“It was a pleasant surprise,” said Bultman, who runs a locksmith business in her town. The Bultman family received three overdue payments, including one for their minor son, totaling $4,200 by the end of December.
Here’s what eligible taxpayers need to know about these special IRS payments.
Also Read – IRS Announces $1,400 Stimulus Payments for Nearly One Million Taxpayers
Who qualifies for the payment?
The IRS is sending payments to taxpayers who filed a 2021 tax return but either left the Recovery Rebate Credit field blank or incorrectly filled it in as $0, even though they were eligible for the credit.
How much will taxpayers receive?
The payment amount will vary depending on individual circumstances, but the maximum amount is $1,400 per taxpayer. In total, the IRS will be sending out $2.4 billion to eligible individuals who failed to claim the credit in 2021.
Why is the IRS sending out these payments?
The Recovery Rebate Credit was created for individuals who did not receive the full Economic Impact Payments in 2020 and 2021. After reviewing its records, the IRS found that many taxpayers had overlooked the credit, prompting the agency to automatically distribute payments to those eligible.
“To make the process simpler and faster, these payments will be sent out automatically, so eligible individuals won’t need to file an amended return,” said Commissioner Werfel.
How will I receive the payment if I qualify?
If you qualify for the Recovery Rebate Credit, you do not need to take any further action. The IRS will automatically send out the payments this month. Eligible taxpayers will receive their payments either by direct deposit or a check sent to the address the IRS has on file. Notifications will also be sent to inform recipients about the payment.
Also Read – IRS Sending $2.4 Billion in Stimulus Checks: Check Your Eligibility Today
What if I haven’t filed my 2021 return?
If you haven’t filed your 2021 tax return yet, you may still be able to receive the payment. To do so, you must file your tax return and claim the Recovery Rebate Credit by April 15, 2025, even if you had minimal or no income during 2021.
How many rounds of COVID stimulus payments were there?
There were three rounds of stimulus payments issued to households during the pandemic, totaling $814 billion. These payments were based on income, tax filing status, and the number of children or dependents.
- In March 2020, the CARES Act provided up to $1,200 per individual and $500 per child.
- In December 2020, the Consolidated Appropriations Act provided up to $600 per individual and $600 per child.
- In March 2021, the American Rescue Plan Act provided up to $1,400 per individual and $1,400 per child.
For more information, the IRS has posted details about eligibility and how payments are calculated on its website.
