The IRS is distributing approximately $2.4 billion to taxpayers who missed out on their COVID-19 stimulus payments. By the end of January, around 1 million taxpayers will receive special payments of up to $1,400 each.
These payments are being sent to individuals who did not claim the Recovery Rebate Credit on their 2021 tax returns. The Recovery Rebate Credit is a refundable tax credit designed for those who did not receive one or more Economic Impact Payments (EIP), commonly referred to as stimulus payments, during the pandemic.
IRS Commissioner Danny Werfel explained, “Our internal data revealed that about one million taxpayers overlooked claiming this credit, even though they were eligible. We’re taking steps to ensure they receive the money they’re owed.”
One beneficiary of this initiative is Ginny Bultman, a 61-year-old locksmith business owner from Colorado. Bultman and her husband did not receive their stimulus payment in 2021. After learning about the IRS’s latest effort, she realized she qualified for the Recovery Rebate Credit. Shortly after, she received a check in the mail.
“It was a wonderful surprise,” Bultman said. The Bultman family received three delayed stimulus payments, including one for their underage son, totaling $4,200 by the end of December.
Here’s what you need to know about these IRS payments:
### Who is eligible for a payment?
The payments are being sent to taxpayers who filed a 2021 tax return but either left the Recovery Rebate Credit section blank or entered $0, despite being eligible for the credit.
### How much will eligible taxpayers receive?
The amount varies, but the maximum payment is $1,400 per individual. In total, the IRS is distributing $2.4 billion to those who failed to claim the credit on their 2021 tax returns. The IRS has provided detailed information online about eligibility and how payments are calculated.
### Why is the IRS sending these payments?
The Recovery Rebate Credit was created to help individuals who did not receive their Economic Impact Payments in 2020 or 2021. After reviewing its data, the IRS discovered that many eligible taxpayers did not claim the credit on their 2021 tax returns.
To simplify the process, the IRS is issuing these payments automatically, eliminating the need for taxpayers to file an amended return. “This approach minimizes hassle and ensures eligible individuals receive their money without additional steps,” Werfel said.
### How will I receive my payment?
If you qualify, no action is required. The IRS will notify eligible taxpayers by mail and will issue payments automatically this month. Payments will be sent via direct deposit or check by late January, using the bank account or address on file from the taxpayer’s 2023 return.
### What if I haven’t filed my 2021 tax return yet?
You may still be eligible. Taxpayers must file a 2021 tax return and claim the Recovery Rebate Credit by April 15, 2025, even if their income was minimal or nonexistent.
### How many rounds of stimulus payments were there?
There were three rounds of COVID-19 stimulus payments, totaling $814 billion. The amounts were based on income, tax filing status, and the number of qualifying dependents.
- **March 2020:** Under the CARES Act, eligible individuals received up to $1,200 per filer and $500 per child.
- **December 2020:** Under the Consolidated Appropriations Act, eligible individuals received up to $600 per filer and $600 per child.
- **March 2021:** Under the American Rescue Plan Act, eligible individuals received up to $1,400 per filer and $1,400 per child.
This initiative aims to ensure that all eligible taxpayers receive the financial support they were entitled to during the pandemic.