The IRS is distributing approximately $2.4 billion to taxpayers who did not receive their COVID stimulus payments. By the end of January, around 1 million taxpayers will receive special payments of up to $1,400 from the IRS. These payments are being sent to those who did not claim a Recovery Rebate Credit on their 2021 tax returns, which is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.
IRS Commissioner Danny Werfel stated that the IRS identified about one million taxpayers who overlooked claiming this credit when they were eligible. One such taxpayer, Ginny Bultman from Colorado, realized she qualified for the Recovery Rebate Credit after reading about the latest IRS payments. Subsequently, she received her check in the mail. The Bultman family received three late stimulus payments, including one for their underaged son, totaling $4,200 by the end of December.
The special payments are being sent to taxpayers who filed a 2021 tax return but either left the Recovery Rebate Credit field blank or filled it out as $0 when they were eligible for the credit. The payments can be up to $1,400 per individual, with the IRS distributing about $2.4 billion in total. Information about eligibility and payment calculations is available online.
The IRS is sending these checks because the Recovery Rebate Credit is a refundable credit for individuals who did not receive the Economic Impact Payments during 2020 and 2021. After reviewing internal data, the IRS found that many eligible taxpayers who filed a 2021 tax return did not claim the credit. To streamline the process, these payments are being made automatically, eliminating the need for taxpayers to file an amended return.
Eligible taxpayers will receive their payments automatically and can expect to receive them by direct deposit or check by late January. The payments will be sent to the bank account or address the IRS has on file. Taxpayers who have not yet filed their 2021 tax return can still receive the money by filing a return and claiming the Recovery Rebate Credit by the April 15, 2025 deadline.
There were three rounds of COVID stimulus payments to households impacted by the pandemic, totaling $814 billion. The amounts were based on income, tax filing status, and number of children or qualifying dependents. The first round under the CARES Act in March 2020 provided up to $1,200 per filer and $500 per child.
