In a move aimed at helping taxpayers, the Internal Revenue Service (IRS) announced that it will issue automatic payments to individuals who were eligible for the Recovery Rebate Credit but did not claim it on their 2021 tax returns. These payments, expected to total $2.4 billion, will arrive by the end of January 2025.
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Recovery Rebate Credit
The Recovery Rebate Credit is a refundable tax credit for individuals who did not receive all or part of their Economic Impact Payments (EIP), commonly referred to as stimulus payments. If eligible, taxpayers can receive up to $1,400 per individual.
While the IRS initially required taxpayers to claim this credit on their 2021 tax returns, it has now automated the process for eligible individuals who missed out, ensuring they don’t need to file an amended return.
How Payments Will Be Delivered
Eligible taxpayers can expect payments through the following methods:
- Direct Deposit: Funds will be deposited into the bank account listed on the taxpayer’s most recent tax return.
- Paper Check: If direct deposit is unavailable, a check will be mailed to the address on record.
The IRS will also send a notification letter confirming the payment.
If a taxpayer has closed their bank account since filing their most recent tax return, the IRS will reissue the payment as a check to the address on file.
Who Is Eligible?
The IRS has identified several categories of eligible taxpayers:
- Those who filed a 2021 tax return but did not claim the Recovery Rebate Credit.
- Individuals who have not yet filed their 2021 tax returns but do so by April 15, 2025.
Even taxpayers with minimal or no income are encouraged to file a 2021 tax return if they haven’t already, as they may qualify for the credit and other refunds.
Filing Deadline
Taxpayers who missed filing their 2021 tax returns can still claim the Recovery Rebate Credit, but they must act by the April 15, 2025 deadline. Filing now could also unlock other potential refunds.
Key Takeaways
- Payments of up to $1,400 per individual will be sent automatically by the IRS to eligible taxpayers.
- No action is required for those identified by the IRS as eligible.
- Taxpayers who have not filed their 2021 returns should do so by April 15, 2025, to claim the credit.
- Keep your mailing address and bank account details updated to avoid delays.
The IRS’s proactive approach ensures that eligible taxpayers receive the support they are entitled to without additional paperwork or stress.
FAQs
What is the Recovery Rebate Credit?
It is a refundable tax credit for missing Economic Impact Payments.
When will payments be issued?
Payments will arrive by the end of January 2025.
Do I need to take action to receive payment?
No action is required for eligible taxpayers identified by the IRS.
How much can I receive?
The maximum payment is $1,400 per individual.
What is the deadline to claim the credit?
Taxpayers must file by April 15, 2025, to claim the credit.
