The Internal Revenue Service (IRS) announced that it will be sending up to $1,400 to approximately 1 million taxpayers who missed claiming their Covid-19 stimulus payments in 2021. This decision is part of a proactive effort to ensure eligible individuals receive the Recovery Rebate Credit, which provides payments for missed Economic Impact Payments (stimulus checks).
IRS Commissioner Danny Werfel explained that the agency noticed that many taxpayers failed to claim the credit despite being eligible. To simplify the process and avoid requiring taxpayers to amend their returns, the IRS will automatically issue payments to those who missed the credit. “To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic,” Werfel said in a press release.
Taxpayers who have not filed a 2021 tax return can still qualify for the credit if they file before April 15, 2025.
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How the Recovery Rebate Credit Works
The Recovery Rebate Credit, part of the American Rescue Plan of 2021, was designed to provide financial relief during the pandemic. It offers up to $1,400 per person, depending on income and filing status. Here’s how the credit breaks down:
- Single filers: You can receive the full $1,400 if your adjusted gross income (AGI) was $75,000 or less in 2021. The credit starts to decrease as your AGI exceeds $75,000 and is fully phased out at $80,000.
- Married filing jointly: Couples can receive up to $2,800 (for two people) if their combined AGI was $150,000 or less. The credit starts to decrease for incomes over $150,000 and phases out entirely at $160,000.
- Dependents: Families can receive $1,400 for each eligible dependent, regardless of age, with the same income phaseout limits as the primary filer.
When to Expect Payment
The IRS will automatically send payments to eligible taxpayers, including those who filed tax returns but left the Recovery Rebate Credit data field blank or entered $0, yet were still eligible for the credit.
No action is required for eligible taxpayers, except for those who have not yet filed a 2021 return. Payments are being sent now and are expected to reach most taxpayers by late January 2025. They will be directly deposited into the bank account listed on the taxpayer’s 2023 tax return or sent via paper check. Taxpayers will also receive a separate letter notifying them about the payment.
If you haven’t filed your 2021 tax return yet, you still have time to claim the credit. Just be sure to file by April 15, 2025.
Also Read – IRS Announces $1,400 Payments: Here’s Who Will Receive Them
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