The Internal Revenue Service (IRS) is working to ensure that eligible taxpayers who missed claiming the Recovery Rebate Credit (RRC) on their 2021 tax returns receive their due funds. By January 2025, the IRS will distribute approximately $2.4 billion in special payments to about one million taxpayers, with payments of up to $1,400 each.
Recovery Rebate Credit
The Recovery Rebate Credit is a refundable credit related to the Covid-19 Economic Impact Payments (EIPs), also known as stimulus checks. These payments were issued in three rounds during the pandemic to provide financial relief. The IRS has identified eligible taxpayers who either left the RRC field blank or mistakenly entered $0 on their 2021 tax returns.
According to IRS Commissioner Danny Werfel, “One million taxpayers overlooked claiming this complex credit when they were actually eligible.”
Payments
The IRS has streamlined the distribution process to reduce the burden on taxpayers. Payments are being issued automatically, eliminating the need to file an amended return.
Payment Distribution
- Direct Deposit:
- Taxpayers with a registered bank account on their 2023 return should have already received their payments directly into their accounts.
- Mailed Checks:
- For those receiving refunds via check, payments will arrive by late January 2025 at the address the IRS has on file.
This automatic process ensures funds reach eligible individuals without requiring additional steps.
Taxpayers
The RRC eligibility rules were complex, leading many taxpayers to overlook the credit. The IRS identified this issue during internal reviews and has acted to rectify the situation by issuing payments directly.
What Should You Do?
- For Direct Deposit Recipients: No further action is required. Payments should already be in your bank account.
- For Check Recipients: Ensure your address is updated with the IRS to avoid delays.
If you believe you are eligible but have not received your payment by early February 2025, contact the IRS for assistance.
Financial Relief
The IRS’s proactive approach to distributing Recovery Rebate Credits underscores its commitment to delivering financial relief to eligible taxpayers. These payments offer a significant boost to those who missed out on earlier stimulus payments, reinforcing the importance of filing accurate tax returns and staying informed about tax credits.
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FAQs
What is the Recovery Rebate Credit?
A refundable credit linked to Covid-19 stimulus payments.
How much is the Recovery Rebate Credit?
Eligible taxpayers can receive up to $1,400.
Do I need to file an amended return to get the payment?
No, the IRS is issuing payments automatically.
When will mailed checks arrive?
Checks will arrive by late January 2025.
What if I haven’t received my payment?
Contact the IRS if your payment hasn’t arrived by February 2025.
