The IRS this week said that some 1 million taxpayers are due to get a surprise windfall, with maximum payouts of $1,400 each. Those are taxpayers who, in fact, were eligible for the credit but, for one reason or another, didn’t claim the benefit on their 2021 tax return. If you’re one of the lucky recipients, you could receive a check in the mail or a deposit to your bank account before long. Here’s what you need to know about the surprise cash.
What are these payments?
That will be part of efforts by the IRS to ensure that taxpayers, who during the COVID-19 pandemic were eligible for stimulus checks but did not receive them, can now claim the amount due. The Recovery Rebate Credit would help those who missed one or more of the EIPs in 2020 and 2021, better known as stimulus checks.
The IRS itself estimated that it had located almost 1 million taxpayers who had filed their 2021 tax return, failed to claim this credit, yet were qualified for it as detailed here, $1,400 being sent automatically – Could I still get a stimulus check from the IRS?. With its initiative to alleviate some of the burdens from the taxpayers, the IRS is sending payments automatically without making the taxpayer file amended returns. However, who is actually qualified for a payment?
To qualify, the taxpayers must meet the following conditions:
1. File a 2021 tax return: The IRS used 2021 tax returns to determine qualifying individuals, those who left blank or entered $0 in the Recovery Rebate Credit field when they were actually qualified.
2. Income thresholds: The full credit is available to individuals with an AGI of up to $75,000 and married couples filing jointly with an AGI of up to $150,000. The credit phases out for incomes above these thresholds and is completely phased out for those individuals making $80,000 or more and couples making $160,000 or more.
3. Didn’t claim the credit: The automatic payments will go only to those who didn’t claim the Recovery Rebate Credit on their 2021 tax returns.
Families with dependents can also get more. A family of four, a married couple with two dependents, could get up to $5,600.
How will the payments be delivered?
The IRS will make these payments via two ways:
1. Direct deposit: If the IRS has a record of your bank account number and information from your filed 2023 tax return, the deposit will be directly made to your bank account.
2. Paper check: If no record on file is found regarding one’s bank details, then a paper check will be mailed to that address on record.
Most of the payments were sent in December 2024, and are due by late January 2025. Those receiving the payments will also get a letter from the IRS about the payment.
What to do if you qualify
If you qualify for the payment, there is nothing you need to do. It is all being done automatically by the IRS. But a couple of things to keep in mind:
1. Check your mail and bank account: Payments are supposed to arrive by late January of 2025. If you don’t see yours by then, you might need to make some inquiries.
2. Update your information: In case you’ve moved or changed bank accounts since filing your 2023 tax return, in case the bank bounces the deposit, the IRS will reissue the payment to your address of record.
3. File a 2021 tax return if necessary: If you believe you might qualify but haven’t filed a 2021 tax return, the IRS will accept it through April 15, 2025, for you to claim the credit.
The IRS is sending out these payments in an attempt to alleviate confusion by the tax credits and ensure people receive money that is coming to them. The aim, according to IRS Commissioner Danny Werfel, is to “minimize headaches” for taxpayers by making the process automatic.
It will also bring forth the issue of most taxpayers facing difficulties in understanding and claiming credits like the Recovery Rebate Credit. More proactively, it is something that the IRS does to make sure that people do get what is coming to them without much inconvenience or delays.
What if you don’t get a payment?
If you think you qualify but haven’t received a payment by late January 2025:
1. File a 2021 Tax Return: You must file a 2021 tax return by April 15, 2025, to claim the Recovery Rebate Credit if you have not already done so.
2. Check your eligibility: Use the IRS’s online tools, such as the “Where’s My Refund?” tool or the IRS2Go app, to track your payment status.
3. Contact the IRS: If you’re still unsure about your eligibility or payment status, consider reaching out to the IRS or consulting a tax professional for assistance.
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