The Internal Revenue Service (IRS) has announced plans to issue automatic payments of up to $1,400 to approximately one million eligible taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns. These payments, set to be sent in late December 2024, are designed to help individuals who missed out on earlier stimulus payments.
What Is the Recovery Rebate Credit?
The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more of the Economic Impact Payments (EIP), also known as stimulus payments, during the COVID-19 relief efforts. While the vast majority of eligible taxpayers have already received their federal stimulus payments, some missed out because they either did not claim the credit on their 2021 tax return or mistakenly listed the amount as $0.
The IRS identified these cases through an internal review of tax returns, prompting the agency to send automatic refunds to those taxpayers who qualify but did not receive the full stimulus amount.
Who Is Eligible for the $1,400 Refund?
Good news for those who qualify: you don’t need to take any additional steps. The IRS will automatically generate payments for eligible individuals based on their 2023 tax return. For most recipients, these funds will be directly deposited into the bank account listed on their return, with payments expected to be issued in late December 2024.
For those whose payments cannot be directly deposited, the IRS will mail checks to the address on file. These paper checks are expected to arrive by late January 2025.
The eligibility criteria are based on the IRS’s data, ensuring that only taxpayers who qualify for the Recovery Rebate Credit will receive the payment. To determine the maximum amount of $1,400, eligible taxpayers can reference the IRS’s online guidelines and tools.
How the IRS Will Notify Eligible Taxpayers
To ensure that everyone who is entitled to the refund knows about the payment, the IRS will send notification letters to each eligible taxpayer. These letters will provide additional details on the amount of the payment and how it was calculated. The IRS urges taxpayers to carefully review the information in these letters to confirm their eligibility and understand the payment process.
Why Some Taxpayers Didn’t Receive the Full Stimulus Payments
The IRS explained that while the majority of taxpayers received their stimulus payments through 2020 and 2021, a number of individuals who filed a 2021 tax return inadvertently missed out on the Recovery Rebate Credit. This often happened when they either failed to fill out the appropriate field for the credit or mistakenly entered a $0 amount when they were eligible to receive more. The new round of payments seeks to correct this oversight.
Conclusion
If you filed a 2021 tax return and were eligible for the Recovery Rebate Credit but did not claim it, the IRS’s late December 2024 payment could be the help you’ve been waiting for. There is no action needed on your part — the IRS will automatically process your payment, either through direct deposit or a mailed check.
For further information on eligibility and how the payments are calculated, taxpayers can visit the IRS website, which provides detailed instructions and resources. Stay alert for the IRS notification letter, and ensure your address and banking details are up to date with the IRS to avoid any delays.
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