In a recent initiative, the Internal Revenue Service (IRS) has begun issuing special payments of up to $1,400 to approximately one million taxpayers who did not claim the Recovery Rebate Credit (RRC) on their 2021 tax returns. This effort aims to distribute a total of $2.4 billion to eligible individuals.
Background on Recovery Rebate Credit
The Recovery Rebate Credit was introduced to provide financial relief to individuals who missed one or more Economic Impact Payments (stimulus checks) during the COVID-19 pandemic. Taxpayers who did not receive the full amount of these payments were eligible to claim the RRC on their 2021 tax returns. However, the IRS identified that many eligible taxpayers either left the RRC field blank or entered $0, thereby missing out on the credit.
Automatic Distribution of Payments
To rectify this oversight, the IRS is automatically distributing these special payments. Eligible taxpayers are not required to take any action. The payments are being sent either via direct deposit to the bank account listed on the taxpayer’s 2023 return or through paper checks mailed to the address on file. The IRS anticipates that most payments will arrive by late January 2025.
Eligibility Criteria
The maximum payment amount is $1,400 per individual. Eligibility primarily includes those who filed a 2021 tax return but did not claim the RRC despite being eligible. Additionally, taxpayers who have not yet filed their 2021 returns can still claim the RRC by submitting their return by the April 15, 2025 deadline.
IRS Commitment to Taxpayer Assistance
IRS Commissioner Danny Werfel emphasized the agency’s dedication to assisting taxpayers, stating, “Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible.” He added that the automatic payments are intended to minimize the burden on taxpayers, eliminating the need for them to file amended returns to receive the credit.
Conclusion
This initiative underscores the IRS’s commitment to ensuring that eligible taxpayers receive the financial support intended for them during the pandemic. Taxpayers are encouraged to review their 2021 tax filings and consult the IRS website for further information on the Recovery Rebate Credit and eligibility criteria.
