AP reports that the Internal Revenue Service (IRS) has initiated a special payment distribution aimed at rectifying an oversight from the 2021 tax filings. Approximately 1 million taxpayers are set to receive up to $1,400, with the total disbursement amounting to about $2.4 billion. These payments are intended for individuals who did not claim the Recovery Rebate Credit on their 2021 returns, despite being eligible for additional stimulus payments related to the COVID-19 economic relief efforts.
The report, citing IRS Commissioner Danny Werfel, noted that that this initiative was spurred by internal data revealing that many taxpayers had not claimed this credit. The payments will be automatically dispatched to those who either left the Recovery Rebate Credit field blank or incorrectly entered $0 on their tax forms, without requiring further action from the recipients.
The method of payment will align with the information provided in the taxpayer’s 2023 tax return, either through direct deposit or by mailing a check, with expectations that most will receive their payments by late January 2025. This process underscores the IRS’s commitment to ensuring that all eligible taxpayers receive the financial support intended during the economic downturn caused by the global health crisis.
For those who haven’t yet filed their 2021 returns, there’s still an opportunity to claim this credit. They must file by the April 15, 2025, deadline, even if their income was minimal. This action could still qualify them for these special payments.
The context of these payments lies within the broader framework of economic relief provided during the COVID-19 pandemic. There were three significant rounds of stimulus payments:
March 2020: Under the CARES Act, individuals could receive up to $1,200, with an additional $500 per child.
December 2020: The Consolidated Appropriations Act allowed for up to $600 per income tax filer and per child.
March 2021: The American Rescue Plan Act increased this to $1,400 per individual and per child.
These rounds collectively disbursed $814 billion, with eligibility based on income levels, filing status, and the number of dependents. However, the likelihood of receiving one of these new special payments is relatively low, as most eligible for the earlier stimulus have already received them. This action by the IRS serves as a final sweep to ensure that no one was inadvertently left behind due to the complexities of tax filings during a period marked by unprecedented economic challenges.
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