Dec 26, 2024, 10:42 AM
Dec 22, 2024, 4:48 PM

Millions of taxpayers set to receive $1,400 IRS payments as news breaks

Highlights
  • The IRS is issuing payments to 1 million taxpayers who did not claim the RRC in 2021.
  • Payments will automatically be sent by late January 2025 to bank accounts or addresses on file.
  • This initiative seeks to rectify tax claim oversights and support individuals impacted by the pandemic.
Story

In December 2024, the Internal Revenue Service (IRS) revealed plans to issue automatic payments to around 1 million eligible taxpayers who did not claim the Recovery Rebate Credit (RRC) on their 2021 tax returns. This decision was announced following an internal analysis that determined many eligible individuals overlooked this complex credit while filing their taxes. The payments are expected to reach taxpayers by late January 2025, either via direct deposit to the bank accounts provided in their 2023 tax returns or by mailed checks. This initiative underlines the IRS's commitment to assist those who might have inadvertently missed out on the stimulus payments introduced as part of the COVID-19 relief efforts. The $1,400 payments aim to compensate taxpayers who either missed one of the Economic Impact Payments (EIPs) or received less than their fair share. IRS Commissioner Danny Werfel stated that the agency is making these payments automatic to reduce filing difficulties and alleviate the burden placed on those affected by the pandemic. Taxpayers do not need to take any action to receive these funds; the IRS will send the money directly based on the current information available to them. For those taxpayers who still have not filed their 2021 returns, there remains an opportunity to receive the RRC. However, they must file their tax returns and claim the credit by the upcoming deadline of April 15, 2025. This essential step ensures that those who have had minimal income or were affected during the pandemic can still benefit from the relief provided through the RRC program. IRS officials anticipate distributing around $2.4 billion to eligible taxpayers who left the Recovery Rebate Credit field blank or filled it incorrectly on their tax returns. Overall, this move by the IRS is part of a broader strategy designed to ensure that as many eligible taxpayers as possible receive the support they need. The agency identifies complex tax issues that often lead to oversight or misunderstandings regarding eligibility, and aims to rectify this by simplifying the process through automatic payments. Each eligible taxpayer will receive a notification letter regarding their payment separately, providing them with clarity on the amount and the rationale behind these automatic payments.

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