The IRS is set to distribute approximately $2.4 billion in special payments to around 1 million taxpayers who missed out on their COVID stimulus payments due to an oversight in claiming the Recovery Rebate Credit on their 2021 tax returns. These automatic payments, amounting up to $1,400 per eligible individual, aim to assist those who failed to claim this refundable credit, which benefits those who did not receive one or more Economic Impact Payments (EIP).
IRS Commissioner Danny Werfel highlighted the importance of this initiative, stating that their internal data revealed many taxpayers overlooked the complex Recovery Rebate Credit despite being eligible. One such beneficiary is Ginny Bultman, a 61-year-old from Colorado, who received an unexpected $4,200 after realizing she qualified for the credit.
Eligible taxpayers will not need to take any action to receive these payments; they will automatically be sent by late January either via direct deposit or check based on the information provided in their 2023 tax returns or existing IRS records.
Taxpayers who haven’t filed their 2021 tax returns yet can still qualify, as long as they file by the April 15, 2025, deadline and claim the Recovery Rebate Credit. This initiative follows three rounds of COVID stimulus payments, which were distributed to support households affected by the pandemic, amounting to $814 billion overall.
The IRS has made it clear that this timely intervention is designed to alleviate the burden on eligible taxpayers by simplifying the process and ensuring they receive the assistance they deserve.
In summary, the IRS’s automatic payments are a positive step for individuals who missed stimulus payments, showcasing the agency’s commitment to accurately reaching those in need and supporting financial stability in the community during challenging times.