In a move to ensure that taxpayers who missed out on federal stimulus payments receive the money they are owed, the IRS has announced that it will issue $1,400 ‘special payments’ to approximately 1 million people.
This is part of an ongoing effort to distribute unclaimed Recovery Rebate Credits to those who qualify. The IRS estimates that the total amount to be sent out in these payments is around $2.4 billion, providing relief to taxpayers who did not claim the credit when they filed their 2021 tax returns.
This article breaks down everything you need to know about these special payments, including eligibility criteria, how the payments will be distributed, and important deadlines.
What is the Recovery Rebate Credit?
The Recovery Rebate Credit was introduced by the federal government as part of its response to the COVID-19 pandemic.
It allowed eligible taxpayers to receive Economic Impact Payments (EIP), commonly known as stimulus checks, to support families during the economic hardship caused by the pandemic.
In some cases, taxpayers did not receive the full amount of their eligible stimulus payments due to various issues such as missing information or changes in their tax situation.
The Recovery Rebate Credit was created to allow these individuals to claim the stimulus payments they were entitled to but did not receive.
How Much is the Special Payment?
The IRS is sending out these special payments to individuals who were eligible but did not claim the Recovery Rebate Credit on their 2021 tax returns.
- Maximum Payment: $1,400 per person
- Total Payout: Approximately $2.4 billion for around 1 million people
While the exact amount may vary depending on eligibility, the maximum payout will be $1,400 for each qualified individual. The payment could be less if you were eligible for a smaller amount based on your income or other factors.
Who is Eligible for the $1,400 Payment?
To be eligible for the $1,400 special payment, taxpayers must meet the following criteria:
- Filed a 2021 tax return: Taxpayers who filed their 2021 return but did not claim the Recovery Rebate Credit are the primary beneficiaries of this payment.
- Left Recovery Rebate Credit blank or reported it as $0: This applies to individuals who missed claiming the credit either by mistake or oversight.
- No prior payments received: Individuals who did not receive their full stimulus payments in 2021 due to issues such as missing or incorrect information are eligible to receive the credit now.
Additionally, taxpayers who haven’t filed a 2021 tax return yet may still be eligible, but they must file by April 15, 2025 to claim the payment and any other refunds they are owed.
Distribution Process and Timeline
The IRS will begin sending the $1,400 special payments to qualified individuals by the end of this month. Here’s what you need to know about how and when you will receive your payment:
| Action | Details |
|---|---|
| Payment Amount | $1,400 per eligible person |
| Disbursement Date | Payments will begin immediately |
| Payment Method | Direct deposit or check, based on tax return |
| Deadline for Payment | By the end of January 2024 |
| Eligibility Deadline for Tax Returns | File by April 15, 2025 to claim credit |
Recipients will receive their payments through the bank account listed on their 2023 tax return, or to the address on file with the IRS. The payment will be automatically processed, so recipients do not need to take any action.
The IRS’s special payments are a significant opportunity for those who missed out on the Recovery Rebate Credit to receive the money they are owed. With $1,400 per person on the table, these payments could provide essential financial support, especially as the holiday season approaches.
If you haven’t yet filed your 2021 tax return, make sure to do so by April 15, 2025, to ensure that you receive the credit and any additional refunds you may be entitled to.
With the IRS handling everything automatically, all you need to do is check your bank account or mail for the stimulus check and enjoy the extra support in these challenging times.
FAQs
1. How do I know if I’m eligible for the $1,400 special payment?
You may be eligible if you filed a 2021 tax return, but did not claim the Recovery Rebate Credit, or left it as $0. If you haven’t filed your tax return, you need to do so by April 15, 2025.
2. Do I need to take any action to receive the payment?
No. If you’re eligible, the IRS will send the payment automatically to the account listed on your 2023 tax return or to your current address.
3. When will I receive the payment?
Payments are expected to be distributed by the end of January 2024. If you qualify, the money will either be sent via direct deposit or check, depending on the information provided in your tax return.
