In a move that could bring some holiday cheer to many Americans, the Internal Revenue Service (IRS) has announced it will send surprise payments of up to $1,400 to about one million people. These payments are for those who missed claiming the Recovery Rebate Credit (RRC) on their 2021 tax returns and are expected to total around $2.4 billion.
What Is the Recovery Rebate Credit?
During the pandemic, millions of Americans received stimulus checks, also known as Economic Impact Payments (EIPs), to help ease the financial strain caused by COVID-19. However, if someone didn’t receive the full amount or missed a payment altogether, they had the chance to claim the difference through the Recovery Rebate Credit on their 2021 tax return.
But here’s the catch: Many people either left this section of the tax form blank or entered the wrong amount, causing them to miss out on money they were eligible for. Now, the IRS is stepping in to fix the issue by sending out automatic payments to those who qualified but didn’t claim the credit.
Who’s Getting These Surprise Payments?
The IRS says these payments are for taxpayers who filed a 2021 tax return but did not claim the Recovery Rebate Credit, even though they qualified for it. The maximum payment amount is $1,400 per person, but the exact amount you receive may depend on your specific circumstances, such as income and family size.
If you’re eligible, there’s good news: You don’t need to do anything. The IRS will send the money directly to the bank account listed on your most recent tax return or mail you a paper check. Expect to see the payment hit your account by late January 2025. A confirmation letter will also be sent explaining the payment.
Why Are These Payments Being Sent Now?
The IRS discovered that many people didn’t take advantage of the Recovery Rebate Credit simply because they weren’t aware of it or misunderstood the filing process. To ensure no one misses out, the agency decided to issue these automatic payments rather than requiring people to file an amended return, which can be a complicated process.
What If You Haven’t Filed Your 2021 Tax Return?
If you haven’t filed your 2021 tax return yet, there’s still time to claim the Recovery Rebate Credit and any other potential refunds. The IRS has extended the deadline for non-filers to submit their 2021 returns until April 15, 2025.
Even if you had little or no income in 2021, it’s worth filing because you could be eligible for this payment and other credits. Filing is the only way to ensure you get any money you’re owed.
Why This Matters
The Recovery Rebate Credit was designed to make sure that Americans who missed out on the stimulus checks during the pandemic still had a way to access that money. With inflation and rising living costs, this extra payment could provide a crucial financial boost for many families.
The government initially issued three rounds of stimulus payments, but millions of Americans faced issues with eligibility or incomplete payments. The IRS’s latest initiative is an attempt to correct those mistakes and provide overdue relief to those who qualify.
What You Should Do Next
- Check your bank account or mailbox: The payments are being issued automatically, so keep an eye out for a deposit or check arriving by the end of January 2025.
- Look for the IRS letter: The IRS will send a notice confirming the payment amount and explaining why you received it.
- File your 2021 tax return if you haven’t already: Don’t miss the April 15, 2025, deadline to claim the credit if you’re eligible.
This effort highlights the importance of filing tax returns, even for those with low or no income. Many benefits, like the Recovery Rebate Credit, are tied to tax filings, so staying updated can help you avoid missing out on crucial payments in the future.
Key Takeaways
- About 1 million taxpayers will receive surprise payments of up to $1,400.
- The IRS is sending the payments automatically—no action is needed.
- Non-filers have until April 15, 2025, to claim any missed Recovery Rebate Credits.
If you think you might be eligible, keep an eye out for the payment and don’t miss your chance to claim it!
