Approximately 1 million taxpayers are set to receive special payments of up to $1,400 from the IRS in the coming weeks. The IRS is distributing about $2.4 billion to taxpayers who failed to claim a Recovery Rebate Credit on their 2021 tax returns. These payments will be directly deposited into eligible individuals' bank accounts or sent via paper check.
The IRS identified that many eligible taxpayers had overlooked claiming the credit, prompting this initiative. The special payments are for those who filed a 2021 tax return but either left the Recovery Rebate Credit field blank or filled it out as $0 when they were actually eligible.
Eligible taxpayers do not need to take any action to receive these payments. The funds will be automatically distributed this month and are expected to arrive by late January 2025, either through direct deposit or by mail to the address on file with the IRS.
The maximum amount for these special payments is $1,400 per individual, with varying payment amounts based on eligibility criteria. The IRS has provided detailed information online regarding eligibility and payment calculation.
For those who have not yet filed their 2021 tax return, there is still an opportunity to claim the Recovery Rebate Credit. Taxpayers must file a tax return and claim the credit by the April 15, 2025 deadline, regardless of their income status.
Regarding the COVID stimulus payments, there were three rounds of payments totaling $814 billion. The amounts distributed were based on income, tax filing status, and the number of children or qualifying dependents. The first round in March 2020 provided up to $1,200 per income tax filer and $500 per child. The second round in December 2020 offered up to $600 per income tax filer and $600 per child. The third round in March 2021 provided up to $1,400 per income tax filer and $1,400 per child.
