IRS Sends Special Payments to Those Who Missed COVID Stimulus Credits
PHOENIX — The IRS is about to send out special payments to approximately 1 million taxpayers who missed out on claiming a crucial COVID-19 stimulus credit. The checks — or direct deposits — could be as much as $1,400 per individual, arriving by the end of January 2025.
These payments are designed for people who were eligible for the Recovery Rebate Credit but didn’t claim it when filing their 2021 tax returns. This credit was a part of the federal Economic Impact Payments (EIP) program, which distributed stimulus funds to eligible individuals during the pandemic. The IRS discovered that many taxpayers had overlooked the opportunity to claim the credit, which is why they are now issuing this special round of payments.
What Is the Recovery Rebate Credit and Why Didn’t I Get It?
The Recovery Rebate Credit was established to ensure that those who missed out on stimulus payments, or received less than the full amount, could still claim the money. The IRS used taxpayers’ 2020 and 2021 income and dependents to calculate how much they should receive. However, for various reasons, some eligible individuals didn’t claim the credit when they filed their 2021 returns.
In some cases, people failed to fill out the appropriate section of their tax return, leaving the Recovery Rebate Credit field blank or entering $0 instead of the amount they were entitled to. As a result, those taxpayers didn’t receive their full stimulus payments, or in some cases, any at all.
How Will the IRS Correct This?
The IRS is taking steps to remedy this situation by automatically sending out payments to eligible taxpayers who didn’t claim the credit. These payments will begin to be issued this month, with recipients seeing the funds in their accounts or receiving paper checks by late January 2025.
Taxpayers do not need to take any action to receive the payment. The IRS will use the bank account or mailing address on file from their 2023 tax return to distribute the funds. The maximum amount for each eligible individual will be $1,400, depending on the total credit they missed out on.
What If I Didn’t File My 2021 Tax Return?
If you haven’t yet filed your 2021 tax return, there’s still a chance to claim the credit and receive the payment. The IRS recommends that taxpayers who missed out on the credit file their tax returns by the April 15, 2025 deadline. This is necessary even for people with minimal or no income, as the IRS will calculate the credit based on the information provided in the return.
Why Are These Payments Coming Now?
The payments are being issued now because the IRS recently discovered, through a review of its internal data, that a significant number of eligible taxpayers did not claim the Recovery Rebate Credit. IRS Commissioner Danny Werfel explained that the agency realized about 1 million taxpayers had overlooked this opportunity, prompting the decision to issue these payments automatically.
“We realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” Werfel said in a statement. “This step will help ensure they get the funds they deserve.”
A Final Look at the COVID Stimulus Payments
The COVID-19 stimulus payments, also known as Economic Impact Payments, were issued in three rounds during the pandemic, totaling $814 billion. These payments were intended to help households facing financial hardship due to the pandemic’s economic effects. The IRS used tax filings to determine eligibility and amounts, taking into account factors like income and dependents.
While most taxpayers have already received the full amount they were entitled to, this final batch of payments aims to ensure no one is left behind. The IRS hopes these special payments will provide financial relief to those who missed out, bringing the final tally of COVID-19 stimulus payments closer to completion.
