Many Americans are facing financial difficulties due to inflation and the rising cost of living, and for some, the special payments issued by the IRS of up to $1,400 will be of great help. Approximately one million taxpayers will benefit from a refundable credit.
The Internal Revenue Service (IRS) carried out the process of automatically issuing payments to those eligible taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax return. This credit corresponds to the Covid-19 stimulus payments.
The IRS has indicated that eligible taxpayers do not need to take any action to receive the refund, as they have been identified in the system. Some have already received their payment by direct deposit to the bank account registered on their 2023 tax return. Although no exact date has been set, distribution of the payments is expected to be completed by January 2025. Those who do not receive a direct deposit will receive a check in the mail, sent to the address the IRS has on file.
The Economic Impact Payment (EIP), distributed in three rounds by the IRS and the U.S. Department of the Treasury, identified that many eligible taxpayers filed their tax returns but did not claim the Recovery Rebate Credit.IRS Commissioner Danny Werfel explained in a December statement: “To make the process easier and ensure this money gets to those who need it, we are making these automatic payments, which means taxpayers will not have to file an amended return to receive it.”
Last chance to claim $1,400 refund
The IRS should have already completed the distribution of special payments to those who filed their 2021 return but omitted the field for the Recovery Rebate Credit or incorrectly completed it as $0, when they were actually eligible for the credit.
However, the IRS clarified on its website that taxpayers who did not file a 2021 tax return may still be eligible to claim the credit if they file a return.
“Eligible taxpayers who did not file a return must file a tax return to claim a recovery rebate credit, even if their income from a job, business or other source was minimal or non-existent,” the IRS said of the claim on 2021 tax returns ahead of the April 15, 2025 deadline.