The Internal Revenue Service (IRS) has announced plans to send automatic payments of up to $1,400 to over 1 million Americans who missed out on claiming the Recovery Rebate Credit (RRC) on their 2021 tax returns. This initiative, starting this month, aims to ensure eligible taxpayers who inadvertently overlooked the credit receive the funds without the need to file an amended tax return.
Who Qualifies for the Payment?
The December payments are specifically targeted at taxpayers who:
1. Filed a 2021 tax return but left the RRC field blank or reported $0, even though IRS data shows they were eligible.
2. Did not receive one or more Economic Impact Payments (EIPs), also known as stimulus payments, during the COVID-19 pandemic.
The IRS emphasized that most taxpayers already received their EIPs or claimed the RRC. These new payments are exclusively for individuals identified through IRS data as eligible but overlooked in the past.
How Automatic Payments Will Work
• No Action Required: Eligible taxpayers do not need to take any steps. The IRS will issue payments automatically, with most arriving by late January 2025.
• Payment Method: Funds will be directly deposited into the bank account listed on the taxpayer’s 2023 tax return or mailed as a paper check to their address of record.
• Notification: Recipients will receive a separate IRS letter notifying them of the payment.
If a recipient’s bank account has been closed, the payment will be returned to the IRS and reissued as a paper check.
How Much Will You Receive?
The payment amount varies based on individual circumstances, with the maximum payment set at $1,400 per individual. The IRS estimates that approximately $2.4 billion in total payments will be issued.
What About Non-Filers?
Taxpayers who did not file a 2021 tax return may still qualify for the credit. However, they must file their return by April 15, 2025, to claim the RRC and any additional refund they might be owed. This applies even if their income was minimal or non-existent.
Additional Resources for Taxpayers
To calculate the amount of Recovery Rebate Credit, taxpayers can:
1. Access their IRS Online Account to review prior EIPs.
2. Consult the IRS FAQ pages for detailed guidance, including:
• Topic G: Finding the Third Economic Impact Payment Amount
• Topic A: General Information on Recovery Rebate Credit
IRS Statement on the Initiative
“The IRS continues to work hard to make improvements and help taxpayers,” said IRS Commissioner Danny Werfel. “These payments are an example of our commitment to go the extra mile for taxpayers. Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible. To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it.”
Other Benefits
The IRS clarified that receiving the Recovery Rebate Credit does not count as income when determining eligibility for federal benefits such as Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or WIC.
Act Now If You Haven’t Filed
Taxpayers who have not yet filed their 2021 tax returns should act promptly to claim the credit. The IRS will also remind taxpayers about other credits, such as the Earned Income Tax Credit, during the upcoming 2025 filing season.
For further information, visit the IRS Recovery Rebate Credit Information Page.
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