A significant number of taxpayers are in line to receive an unexpected financial boost as the Internal Revenue Service (IRS) prepares to issue stimulus payments of up to $1,400. These payments, totaling approximately $2.4 billion, aim to reach individuals who missed out on claiming a Recovery Rebate Credit on their 2021 tax returns. An estimated one million taxpayers will benefit from this initiative. The IRS has confirmed that these automatic payments began in December and should be completed by late January. Eligible recipients do not need to take any action; payments will be sent directly to the bank accounts or addresses on file with the IRS.

The IRS also plans to notify eligible taxpayers through separate letters about the special payment. To qualify for this stimulus check, individuals must have filed a 2021 tax return but inadvertently overlooked or incorrectly reported the Recovery Rebate Credit. Payments vary but cap at $1,400 per individual. Those who have yet to file their 2021 tax returns can still claim the credit by the April 15, 2025, deadline. This latest round is part of three rounds of pandemic relief payments, amounting to $814 billion in total support.

Understanding the Latest Round of Stimulus Payments

This new wave of stimulus payments aims to address overlooked claims from the previous tax year. The IRS identified around one million taxpayers who failed to claim the Recovery Rebate Credit when they were eligible. Commissioner Danny Werfel highlighted that the agency noticed many taxpayers did not properly claim this complex credit. As a result, the IRS has taken steps to rectify this oversight and ensure eligible individuals receive the funds they are entitled to.

The IRS has initiated the distribution process for these checks, which started in December and should conclude by late January. Eligible taxpayers do not need to take any additional steps to receive their payments. The money will be automatically deposited into the bank accounts listed on the taxpayer’s 2023 return or mailed to the address on file with the IRS. Additionally, the IRS will send notification letters to inform recipients about the special payment. Payments vary depending on individual circumstances, with a maximum of $1,400 per person. The IRS website provides detailed information regarding eligibility and how the payment amounts were determined.

Eligibility and Future Steps for Unclaimed Stimulus Funds

To qualify for this stimulus payment, individuals must have filed a 2021 tax return but either left the Recovery Rebate Credit field blank or filled it out as $0 when they were actually eligible. Most taxpayers who were eligible for earlier federal stimulus payments, known as Economic Impact Payments, have already received them. However, this special round targets those who missed out due to filing errors. The IRS encourages anyone who believes they may be eligible to review their tax filings carefully.

Taxpayers who have not yet filed their 2021 tax returns can still claim the Recovery Rebate Credit by the April 15, 2025, deadline. Even if income was minimal or nonexistent, filing a return is crucial to accessing this potential refund. This latest round of payments is part of a broader series of pandemic relief efforts. There were three rounds of stimulus payments issued during the pandemic, totaling $814 billion. Each round had different criteria based on income, tax status, and dependents. In March 2020, eligible individuals received up to $1,200 per filer and $500 per child. In December 2020, the amount increased to $600 per filer and per child. Finally, in March 2021, the American Rescue Plan Act provided up to $1,400 per filer and per child.