(WDNews) The Internal Revenue Service (IRS) is set to issue automatic payments to taxpayers who were eligible but did not claim the 2021 Recovery Rebate Credit on their tax returns. This initiative, announced Friday, comes after an agency review revealed approximately 1 million taxpayers overlooked the credit when filing their 2021 returns.
Eligible taxpayers can expect payments to be processed before the end of December 2024 and completed by late January 2025. The payments will be sent either to the bank account associated with the taxpayer’s 2023 tax return or to their address of record.
“If a taxpayer has closed their bank account since filing, they don’t need to take any action,” the IRS explained. “The bank will return the payment to the IRS, which will reissue it to the taxpayer’s address.”
The Recovery Rebate Credit, created in response to the COVID-19 pandemic, provided financial relief through Economic Impact Payments (stimulus checks). While most eligible taxpayers have already received the payments, some left the Recovery Rebate Credit section of their 2021 returns blank or reported $0.
The IRS will also include a notification letter with the payments. Refund amounts will vary based on eligibility, with a maximum payment of $1,400 per individual. Altogether, the IRS expects to distribute around $2.4 billion in payments.
IRS Commissioner Danny Werfel highlighted the agency’s efforts, saying, “These payments demonstrate our commitment to simplifying processes and getting funds to taxpayers who deserve them. By automating these payments, we’ve eliminated the need for filing amended returns.”
Filing Deadline Approaching for 2021 Returns
For taxpayers who have not yet filed their 2021 tax returns, there is still time to claim the Recovery Rebate Credit. However, returns must be filed by April 15, 2025, to qualify.
Taxpayers are encouraged to act promptly to ensure they receive any credits for which they are eligible.
