Surprise Stimulus Checks on the Way for Over 1 Million Taxpayers
The Internal Revenue Service (IRS) has announced that it will be distributing a total of $2.4 billion to approximately 1 million taxpayers who failed to claim the Recovery Rebate Credit on their 2021 tax returns. This unexpected windfall will bring a welcome boost to those who missed out on COVID stimulus payments or received less than the full amount.
Who’s Eligible for the Surprise Payment?
The IRS discovered that many eligible taxpayers hadn’t claimed the credit, despite being entitled to it. According to IRS Commissioner Danny Werfel, “Our internal data revealed that one million taxpayers overlooked claiming this complex credit when they were actually eligible.” If you filed a 2021 tax return but left the data field for the Recovery Rebate Credit blank or filled it out as $0, you might be in line for a surprise payment.
How Much Can You Expect?
While most taxpayers have already received their Economic Impact Payments, this special payment is aimed at those who missed out. The maximum amount per individual is $1,400, although payments will vary. The IRS has posted information online about eligibility and how the payment was calculated.
What Do You Need to Do?
The good news is that eligible taxpayers don’t need to take any action. The payments will be sent automatically this month and should arrive by direct deposit or check by late January 2025. They’ll be sent to the bank account listed on your 2023 return or to the address the IRS has on file.
Still Time to Claim Your Payment
If you haven’t already, you can still receive the money by filing a tax return and claiming the Recovery Rebate Credit by the April 15, 2025 deadline. This applies even if your income from a job, business, or other source was minimal or nonexistent.
A Brief History of Stimulus Payments
There were three rounds of payments to households impacted by the pandemic, totaling $814 billion. The amounts received by taxpayers were based on their income, tax filing status, and number of children or qualifying dependents. The CARES Act, Consolidated Appropriations Act, and American Rescue Plan Act all played a role in providing financial support during a difficult time.
Stay Informed
The IRS will send separate letters to eligible taxpayers notifying them of the special payment. Keep an eye out for this letter and check the IRS website for more information on eligibility and payment calculations.
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