The IRS is taking steps to help taxpayers by sending automatic payments to individuals who missed claiming the Recovery Rebate Credit on their 2021 tax returns. Here’s what you need to know:
What is the Recovery Rebate Credit?
The Recovery Rebate Credit is a refundable credit for people who didn’t receive their full Economic Impact Payments (EIP), also known as stimulus payments. These payments were designed to provide financial relief during the COVID-19 pandemic.
Who Will Get These Automatic Payments?
After reviewing their records, the IRS found that many eligible taxpayers filed a 2021 tax return but didn’t claim the Recovery Rebate Credit. To fix this, the IRS will automatically send payments to:
- Taxpayers who left the Recovery Rebate Credit section blank or entered $0 when they were eligible for the credit.
- Eligible individuals who do not need to file an amended return.
How Much Are the Payments?
The maximum payment is $1,400 per person, but the exact amount depends on individual circumstances. In total, the IRS expects to distribute about $2.4 billion in payments.
When Will Payments Arrive?
Payments will start going out in December 2024 and should reach eligible taxpayers by late January 2025. They’ll be sent via:
- Direct deposit to the bank account on file.
- Paper check mailed to the address of record.
Additionally, the IRS will send a separate letter to confirm the payment.
What About Taxpayers Who Haven’t Filed a 2021 Tax Return?
If you didn’t file a 2021 tax return but think you might qualify for the Recovery Rebate Credit, you still have time. The deadline to file and claim the credit is April 15, 2025. Even if your income was low or you had no income, you may still be eligible for the credit.
Important Notes for Taxpayers:
- No Action Needed for Automatic Payments: If you’re eligible based on IRS records, payments will arrive automatically.
- Verify Your Records: If you’re unsure about your eligibility, check your IRS Online Account to review your Economic Impact Payments and calculate your Recovery Rebate Credit.
- Payments Are Not Taxable: These credits don’t count as income and won’t affect your eligibility for federal benefits like SNAP, SSI, TANF, or WIC.
IRS Commitment to Supporting Taxpayers
The IRS continues to work on making tax credits and benefits easier to access. As the 2025 tax season approaches, the agency will also remind taxpayers about other valuable credits, such as the Earned Income Tax Credit, to ensure everyone gets the refunds they’re entitled to.
For more details on the Recovery Rebate Credit and other tax credits, visit the IRS website or consult a tax professional.
