
Starting January 27, 2025, the IRS will begin accepting and processing 2024 income tax returns. However, what’s catching attention is the announcement that the agency is distributing approximately $2.4 billion in stimulus payments to taxpayers who missed out on their COVID-related stimulus payments.
By the end of January, around 1 million taxpayers are expected to receive these payments, which could be as high as $1,400 per individual.
The payments are targeted at taxpayers who didn’t claim the Recovery Rebate Credit on their 2021 tax returns. This credit is designed for individuals who were eligible for, but didn’t receive, one or more of the Economic Impact Payments (EIPs), commonly referred to as stimulus payments.
Why Are These Payments Being Issued?
IRS Commissioner Danny Werfel explained that a review of internal data revealed many taxpayers failed to claim this credit, likely due to its complexity. “We realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” Werfel said in a statement.
One example is Ginny Bultman, 61, of Colorado. After missing her 2021 stimulus payments, she learned about the Recovery Rebate Credit through the IRS initiative and soon received $4,200 for her family, including a payment for her underage son. “It was a pleasant surprise,” said Bultman.
Who Qualifies for These Payments?
The payments are being sent to taxpayers who:
- Filed a 2021 tax return but left the Recovery Rebate Credit field blank.
- Entered $0 for the credit, despite being eligible.
How Much Can Taxpayers Receive?
Eligible taxpayers can receive up to $1,400 per individual. The total distribution from the IRS will amount to about $2.4 billion.
How Will You Receive Your Payment?
The IRS is making the process automatic to eliminate the need for taxpayers to file an amended return. Payments will be issued via direct deposit or mailed checks, depending on the information on file with the IRS. Letters will be sent to notify eligible taxpayers.
Can You Still Claim the Credit if You Missed It?
If you haven’t filed a 2021 tax return yet, there’s still time to claim the Recovery Rebate Credit by the April 15, 2025 deadline. This applies even if your income in 2021 was minimal or nonexistent.
A Quick Recap of COVID Stimulus Payments
There were three rounds of Economic Impact Payments:
- March 2020: Up to $1,200 per filer and $500 per child under the CARES Act.
- December 2020: Up to $600 per filer and $600 per child under the Consolidated Appropriations Act.
- March 2021: Up to $1,400 per filer and $1,400 per child under the American Rescue Plan Act.
Altogether, these payments totaled $814 billion, with amounts based on income, tax filing status, and number of dependents.
If you think you might qualify for these newly issued payments, be sure to check your mailbox or bank account by the end of January!