Millions of Americans are set to receive an unexpected financial boost as the IRS prepares to distribute up to $1,400 in direct payments. This initiative is aimed at taxpayers who missed out on claiming the Recovery Rebate Credit on their 2021 tax returns. Here’s what you need to know about the payments, who qualifies, and how to ensure you don’t miss out.
What Is the Recovery Rebate Credit?
The Recovery Rebate Credit was designed during the pandemic to help individuals who didn’t receive their full stimulus payments. If you missed one or more of the Economic Impact Payments (also called stimulus checks) from 2020 or 2021, you were eligible to claim this credit when filing your 2021 taxes.
Unfortunately, many eligible taxpayers either left the Recovery Rebate Credit blank or incorrectly entered $0, missing out on a significant payment. To fix this issue, the IRS is stepping in to automatically issue the payments.
Who Is Eligible?
The IRS identified roughly one million taxpayers who filed a 2021 tax return but failed to claim the credit despite being eligible. These individuals can expect to receive up to $1,400 per person without needing to take any additional steps.
If you filed a 2021 return but didn’t properly claim the Recovery Rebate Credit, you’re likely already on the list for these automatic payments.
When Will Payments Be Sent?
Payments are scheduled to be distributed starting in December 2024, with most people receiving their funds by late January 2025. Direct deposits will go to the bank account listed on your most recent tax return, while others will receive paper checks at the address on file.
Additionally, the IRS plans to send a confirmation letter once your payment is issued.
What If You Haven’t Filed a 2021 Tax Return?
If you didn’t file your 2021 taxes, it’s not too late to claim the Recovery Rebate Credit. The IRS encourages eligible individuals to file their 2021 return before April 15, 2025. Even if you earned little to no income that year, filing your taxes ensures you can claim this credit and any other refunds you might be entitled to.
What You Need to Do
If you’re eligible and already filed your 2021 taxes, you don’t need to take any action—your payment will be issued automatically. However, non-filers should act now by submitting their 2021 tax returns to claim their credit before the deadline.
This move by the IRS is a clear effort to ensure that no taxpayer misses out on financial relief they were entitled to during the pandemic. If you believe you’re eligible, be sure to check your tax records and keep an eye out for your payment this coming winter.
