IRS to Distribute Up to $1,400 to Million Taxpayers: Who Qualifies and Why Now?
PHOENIX — In exciting news for approximately 1 million taxpayers, the IRS is set to automatically distribute special payments of up to $1,400 in the upcoming weeks. These payments will be directly deposited into eligible individuals’ bank accounts or sent via mail in the form of a paper check. This initiative comes as the IRS aims to allocate about $2.4 billion to taxpayers who overlooked claiming a Recovery Rebate Credit on their 2021 tax returns. Those who missed out on one of the COVID stimulus payments or received less than the full amount were eligible to claim this credit. However, the IRS recently uncovered that many eligible taxpayers failed to do so, prompting this unexpected distribution of funds.
What’s the likelihood I’ll receive a check?
Unfortunately, the chances of receiving a special payment are quite slim. The majority of taxpayers eligible for the federal stimulus payments, formally known as Economic Impact Payments, have already received them. The recent special payments are specifically for taxpayers who submitted a 2021 tax return but either left the data field for the Recovery Rebate Credit blank or entered $0 when they were actually eligible for the credit.
How will this work?
Eligible taxpayers do not need to take any action to receive the payment. The funds will be automatically distributed this month and are expected to reach recipients via direct deposit or check by late January 2025. The amount of each payment may vary, with the maximum being $1,400 per individual. The IRS has provided detailed information online regarding eligibility criteria and the calculation of these special payments. Additionally, the IRS plans to send separate letters to inform eligible taxpayers about the impending payment.
What if I haven’t filed my 2021 tax return yet?
Even if you have not yet filed your 2021 tax return, there is still a possibility of receiving the payment. However, it is essential to file a tax return and claim the Recovery Rebate Credit before the deadline of April 15, 2025, regardless of whether your income was minimal or nonexistent from any job, business, or other sources.
How many rounds of COVID stimulus payments were there?
Throughout the course of the pandemic, there were three rounds of stimulus payments totaling $814 billion, aimed at assisting households impacted by the crisis. The amounts distributed to taxpayers were based on factors such as income, tax filing status, and the number of children or qualifying dependents. The three rounds of payments occurred in March 2020, December 2020, and March 2021 under the CARES Act, Consolidated Appropriations Act, and the American Rescue Plan Act, respectively.
