Millions of taxpayers in the United States are set to receive special payments of up to $1,400 from the Internal Revenue Service (IRS). If you’re wondering whether you’re eligible or how these payments work, here’s a clear breakdown of the key details.
Who Will Receive the Payments?
The IRS has announced that approximately 1 million taxpayers will automatically receive these payments in the coming weeks. The recipients are individuals who failed to claim the Recovery Rebate Credit on their 2021 tax returns. These credits were intended to help people who missed out on one of the COVID-19 stimulus payments or received less than the full amount.
Eligibility Criteria:
Taxpayers who filed a 2021 tax return.
Individuals who left the Recovery Rebate Credit field blank or entered $0 when they were eligible.
IRS Commissioner Danny Werfel explained, “Looking at our internal data, we realised that one million taxpayers overlooked claiming this complex credit when they were actually eligible.”
How Will Payments Be Sent?
Eligible taxpayers don’t need to take any action to receive the payments. The IRS will distribute the money automatically. Here’s how it will work:
Delivery Methods: Payments will be sent via direct deposit or as a paper cheque.
Timeline: Funds should arrive by late January 2025.
Bank Details: Deposits will be made to the account listed on your 2023 tax return. Cheques will be mailed to the address on file.
The maximum payment amount is $1,400 per individual, and the IRS will notify eligible taxpayers with a separate letter explaining the payment.
What If I Haven’t Filed My 2021 Tax Return?
If you haven’t filed your 2021 tax return yet, there’s still time to qualify for the payment. To be eligible:
File your 2021 tax return by 15 April 2025.
Claim the Recovery Rebate Credit, even if you had minimal or no income during that year.
For more information, visit the IRS’s official website.
Background: COVID-19 Stimulus Payments
The Recovery Rebate Credit was tied to the three rounds of COVID-19 stimulus payments issued during the pandemic. These payments provided a total of $814 billion to households in need. Here’s a quick recap:
March 2020: Under the CARES Act, eligible individuals received up to $1,200 per filer and $500 per child.
December 2020: The Consolidated Appropriations Act provided up to $600 per filer and $600 per child.
March 2021: The American Rescue Plan Act delivered up to $1,400 per filer and $1,400 per child.
The IRS determined the amounts based on income, filing status, and the number of dependents.
What Happens If Congress Doesn’t Fund the Government?
While government funding uncertainties may raise questions, the IRS assures that these payments will proceed as planned. However, taxpayers are encouraged to stay updated by checking the IRS website for any changes.
Key Takeaways
Automatic Payments: Eligible taxpayers will receive up to $1,400 without needing to take further action.
Deadline to Act: If you haven’t filed a 2021 tax return, do so by 15 April 2025.
More Information: Visit the IRS’s official website for detailed guidance.
With these payments, the IRS aims to ensure that eligible taxpayers receive the financial support they deserve. Be sure to check your eligibility and take action if needed.