As 2025 begins, approximately one million Americans are set to receive special payments from the Internal Revenue Service (IRS).
These payments, up to $1,400 per individual, are aimed at those who missed out on the Recovery Rebate Credit (RRC) on their 2021 tax returns. The IRS has identified eligible taxpayers and will distribute a total of about $2.4 billion in the coming weeks.
Understanding the Recovery Rebate Credit
The Recovery Rebate Credit was introduced to provide financial relief during the COVID-19 pandemic. It allowed individuals who did not receive the full amount of Economic Impact Payments (EIPs), commonly known as stimulus checks, to claim the remaining amount on their tax returns.
However, the IRS discovered that many eligible taxpayers either left the RRC field blank or entered $0 on their 2021 returns, missing out on the credit.
Automatic Payments: No Action Required
To rectify this oversight, the IRS will automatically issue payments to eligible individuals. No additional action is needed from taxpayers.
The payments will be disbursed via direct deposit or mailed as paper checks, depending on the information provided in the 2023 tax returns. Recipients can expect to receive their payments by late January 2025.
Eligibility Criteria
The IRS has outlined specific criteria for these payments:
- Filed 2021 Tax Return: Taxpayers must have filed a 2021 tax return.
- Missed RRC: The Recovery Rebate Credit field was either left blank or incorrectly filled with $0.
- Income Thresholds: Eligibility for the full payment is determined by adjusted gross income (AGI):
- Single filers with AGI up to $75,000.
- Married couples filing jointly with AGI up to $150,000.
- Heads of household with AGI up to $112,500.
Payments will phase out for incomes above these thresholds.
Payment Details
The amount each individual receives will vary based on their filing status and dependents. The maximum payment is $1,400 per person.
For example, a married couple filing jointly could receive up to $2,800, plus $1,400 for each qualifying dependent.
Important Deadlines
Taxpayers who have not yet filed their 2021 tax returns still have an opportunity to claim the Recovery Rebate Credit.
The deadline to file and claim the credit is April 15, 2025. Even individuals with minimal or no income are encouraged to file to receive any refunds they might be owed.
| Criteria | Details |
|---|---|
| Maximum Payment | $1,400 per individual |
| Total Distributed Amount | Approximately $2.4 billion |
| Eligibility | Filed 2021 tax return; missed claiming RRC; within specified income thresholds |
| Payment Method | Direct deposit or paper check |
| Expected Receipt Date | By late January 2025 |
| Action Required | None for those who filed 2021 returns; non-filers must submit by April 15, 2025 to claim RRC |
Next Steps for Taxpayers
Eligible taxpayers will receive a letter from the IRS notifying them of the payment. If the bank account listed on the 2023 tax return is closed, the bank will return the payment to the IRS, and a check will be mailed to the address on file.
Taxpayers are advised to ensure their mailing information is current to avoid delays.
FAQs
1. Who qualifies for the upcoming IRS payments?
Individuals who filed a 2021 tax return but did not claim the Recovery Rebate Credit, despite being eligible, qualify for the payments.
2. Do I need to take any action to receive this payment?
No action is required if you filed a 2021 tax return. The IRS will automatically issue the payment.
3. How will I receive my payment?
Payments will be sent via direct deposit to the bank account on your 2023 tax return or mailed as a paper check to your address on file.
4. What if I haven’t filed my 2021 tax return yet?
You have until April 15, 2025, to file your 2021 tax return and claim the Recovery Rebate Credit.
5. How can I check the status of my payment?
The IRS will send a letter notifying you of the payment. You can visit the IRS website or contact their support services for further information.
