$1400 Stimulus Payment: The Internal Revenue Service (IRS) has identified over 1 million taxpayers who failed to claim the Recovery Rebate Credit on their 2021 tax returns. In response, the IRS is now distributing approximately $2.4 billion in stimulus payments to ensure these individuals receive the financial relief they missed out on.

Here’s a breakdown of how the process works and what you need to know about these payments.

The Recovery Rebate Credit

Introduced during the Covid-19 pandemic, the Recovery Rebate Credit allowed taxpayers to claim any unpaid amounts from the Economic Impact Payments (EIPs), commonly known as stimulus checks. These payments were issued in three rounds as part of government relief efforts and were managed by the IRS and the U.S. Department of the Treasury.

However, IRS Commissioner Danny Werfel revealed that an internal review found approximately 1 million eligible taxpayers did not claim the credit on their 2021 tax returns. Many individuals either left the relevant field blank or entered “$0” by mistake, missing out on funds they were entitled to.

Automatic Payment Distribution

To simplify the process for taxpayers, the IRS has opted to issue payments automatically rather than requiring individuals to file amended tax returns.

  • Direct Deposit: Taxpayers who provided banking details on their 2023 tax returns should have already received their payments via direct deposit.
  • Checks by Mail: For taxpayers who opted for paper checks, payments will arrive by the end of January 2025 at the address currently on file with the IRS.

According to Werfel, this automated approach reduces administrative hurdles and ensures eligible taxpayers receive their refunds promptly.

Eligibility Criteria

Taxpayers eligible for these payments include those who:

  • Filed a 2021 tax return but did not claim the Recovery Rebate Credit.
  • Qualified for one or more rounds of Economic Impact Payments but did not receive them.

Eligible individuals could receive up to $1,400 per person, representing missed stimulus funds from pandemic relief initiatives.

What Taxpayers Need to Do

In most cases, no action is required. The IRS has already identified eligible individuals through its system. However, there are a few steps taxpayers can take to ensure a smooth process:

  1. Check for Direct Deposits: If your banking information is current in the IRS database, monitor your account for the payment.
  2. Update Your Address: If you receive refunds via mail, ensure your address on file with the IRS is accurate. You can update it by submitting Form 8822 if necessary.

Why This Matters

This initiative underscores the IRS’s commitment to helping taxpayers access the financial relief they deserve. By addressing errors and oversights in Recovery Rebate Credit filings, the IRS is ensuring millions of Americans receive much-needed support, even years after the initial stimulus payments were distributed.

The effort also highlights the importance of thoroughly reviewing tax returns. Small mistakes, such as leaving a field blank, can result in missed benefits. This proactive approach by the IRS aims to correct those errors and provide overdue relief to eligible taxpayers.

Through this initiative, the IRS reaffirms its role in supporting individuals and families, ensuring they receive every dollar they are entitled to during challenging times.