The Internal Revenue Service (IRS) of the United States has announced that it will be issuing payments totaling approximately $2.4 billion to a million American taxpayers who are eligible but had not previously applied for pandemic relief funds.
The IRS made this announcement on Friday, December 20th, through a press release on its official website. According to the IRS, internal data shows that around 1 million taxpayers had neglected to claim the Recovery Rebate Credit (RRC) on their 2021 tax returns.
The Recovery Rebate Credit is a refundable credit for taxpayers who did not receive one or more Economic Impact Payments, also known as stimulus payments, during the pandemic. This credit can reduce tax liabilities, increase refund amounts, or be directly deposited into eligible taxpayers’ accounts by the IRS.
IRS Commissioner Danny Werfel stated, “By reviewing our internal data, we have identified that 1 million taxpayers overlooked and missed claiming this relatively complex credit for which they were actually eligible.”
Beneficiaries eligible for this round of payments include those taxpayers who, despite qualifying for the credit, left the “Recovery Rebate Credit” section blank or entered $0 on their 2021 tax returns. Normally, individuals who did not apply for the Recovery Rebate Credit would have to file an amended tax return to receive this money, but the IRS has waived this requirement.
Werfel further explained, “To minimize inconvenience and get this money to eligible taxpayers as quickly as possible, we will be automatically issuing these payments. This means that these individuals do not need to claim the money by resubmitting amended tax returns.”
It is expected that the majority of these additional payments will be delivered by the end of January 2025. Each individual is eligible for up to $1,400 in additional payments, which will be deposited directly into qualified taxpayers’ bank accounts or sent out via paper checks.
For eligible taxpayers, the payments will be sent to the bank accounts or mailing addresses associated with their 2023 tax returns. In cases where the listed bank account is closed, the payment checks will be resent to the taxpayer’s recorded address. The IRS emphasized that taxpayers do not need to take any additional steps for this process.
Additionally, taxpayers will receive a separate letter notifying them that the additional payments have been issued.
The IRS also noted that individuals who have not yet filed their 2021 tax returns are still eligible for the credit. However, these taxpayers must file their tax returns by April 15, 2025, to claim the credit and any other potential additional payments.
Furthermore, applying for the Recovery Rebate Credit will not impact individuals’ eligibility for federal benefit programs, including Supplemental Security Income and the Supplemental Nutrition Assistance Program.
As the 2025 tax season approaches, the IRS is intensifying efforts to educate taxpayers on various credits and deductions, including those related to relief measures implemented during the pandemic.