The Internal Revenue Service (IRS) has announced plans to issue automatic payments to eligible taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns. This move comes after the agency found that approximately 1 million taxpayers did not claim the pandemic-related credit when they were eligible to receive it.
IRS Commissioner Danny Werfel stated that the agency is committed to helping taxpayers and making improvements. The automatic payments will be made before the end of December to minimize headaches for eligible taxpayers who may have overlooked claiming the credit.
Most taxpayers who were eligible for the Recovery Rebate Credit or for one or more stimulus payments have already received those credits and payments. The special payments announced by the IRS are for qualified taxpayers who filed a 2021 tax return with the data field for the Recovery Rebate Credit left blank or filled out as $0 when they were actually eligible for the credit.
The amounts of the Recovery Rebate Credit payments vary based on several factors, with the maximum payment being $1,400 per individual. The total amount of payments to be distributed is estimated to be around $2.4 billion.
Taxpayers who did not claim the credit on their 2021 tax return are expected to receive the payments from the IRS by late January 2025. The payment will be sent to the bank account listed on the taxpayer's 2023 tax return or to their address of record.
There is a looming deadline in the first half of 2025 for taxpayers who have not filed their 2021 tax returns. They must file by April 15 to still receive a Recovery Rebate Credit that they are eligible for. The IRS will include a letter with the payment, and if a taxpayer has closed the bank account associated with their 2023 tax return, the bank will return the payment to the IRS for reissuance to the taxpayer's address of record.