IRS to Distribute $2.4 Billion in in Stimulus Checks to Overlooked Taxpayers.

The IRS is set to distribute approximately $2.4 billion in stimulus payments to taxpayers who missed out on claiming the Recovery Rebate Credit on their 2021 tax returns. Around 1 million individuals will receive up to $1,400 each by the end of January.

Who Will Receive the Payments?

These payments are intended for taxpayers who filed their 2021 tax returns but either left the Recovery Rebate Credit field blank or incorrectly entered $0, despite being eligible for the credit. This credit applies to those who did not receive one or more Economic Impact Payments (EIP), commonly known as stimulus payments.

Payment Details

The amount each eligible taxpayer will receive varies, with a maximum payment of $1,400 per individual. The total distribution will reach about $2.4 billion, aimed at those who failed to claim the Recovery Rebate Credit on their 2021 returns.

Reason for the Payments

The Recovery Rebate Credit allows individuals who missed out on previous stimulus payments to receive their entitled funds. The IRS identified these overlooked claims during an internal review and decided to automatically distribute the payments to simplify the process for eligible taxpayers.

“We identified about one million taxpayers who were eligible but didn’t claim this complex credit,” said IRS Commissioner Danny Werfel. “To streamline the process, these payments will be issued automatically without requiring an amended return.”

Receiving Your Payment

Eligible taxpayers don’t need to take any action. The IRS will send out notifications and automatically issue payments via direct deposit or checks. These payments should arrive by late January, using the bank account or address on file from the taxpayer’s 2023 return.

Filing Late Returns

If you haven’t filed your 2021 tax return yet, you may still qualify. The IRS advises filing a return and claiming the Recovery Rebate Credit by the April 15, 2025, deadline, even if you had minimal or no income.

Previous Rounds of Stimulus Payments

There were three rounds of stimulus payments during the pandemic, totaling $814 billion. The payments varied based on income, filing status, and dependents:

• March 2020 (CARES Act): Up to $1,200 per filer and $500 per child.
• December 2020 (Consolidated Appropriations Act): Up to $600 per filer and $600 per child.
• March 2021 (American Rescue Plan Act): Up to $1,400 per filer and $1,400 per child.

For more information on eligibility and payment calculations, the IRS has additional resources available online.