The Internal Revenue Service (IRS) is in the process of distributing a figure amounting to $2.4 billion to eligible taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns, corresponding to their Covid-19 stimulus payments
The IRS reported that by the end of January, approximately 1 million taxpayers will receive special payments of up to $1,400, for a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.
The Economic Impact Payment was paid in three rounds and the funds were distributed by the IRS and the U.S. Department of the Treasury. However, IRS Commissioner Danny Werfel said in a statement that “when reviewing our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible.”
How does the IRS distribute the $1,400 payment to eligible taxpayers?
The IRS is sending special payments to those taxpayers who filed a 2021 tax return but left the data field for the Recovery Rebate Credit blank or completed it as $0 when they were actually eligible for the credit.
“In an effort to minimize burden and get this money into the hands of eligible taxpayers, we are issuing these payments automatically, meaning people will not have to go through the extensive process of filing an amended return to receive it,” Danny Werfel said in the statement.
Eligible taxpayers have already been detected in the IRS system and do not have to do anything to claim the refund. In fact, those who have a bank account registered on their 2023 return should have already received a direct deposit.
But if the way to receive refunds is by sending a check, the document will arrive at the end of January 2025 at the address that the IRS has on file.