The Internal Revenue Service (IRS) released that nearly one million people will get automatic payments within an initiative to distribute Recovery Rebate Credits worth around $2.4 billion. Payments are scheduled to go out by late January 2025, and the eligible taxpayers need not apply.
This is following an internal review that the IRS conducted, during which it was discovered that millions of taxpayers who filed their returns for 2021 had not claimed a Recovery Rebate Credit that they were eligible for. As a result, the IRS is now automatically processing payments to correct the oversight, thus eliminating the need for taxpayers to file amended returns.
“We identified that nearly one million taxpayers missed out on this credit due to its complexity,” said IRS Commissioner Danny Werfel. “To simplify the process and ensure eligible individuals receive their payments, we’re issuing these funds automatically.”
The Recovery Rebate Credit was created in the early days of the COVID-19 pandemic. It relieves those who did not receive stimulus payments through the mail. It relieves individuals who did not receive any mailed stimulus payment with the relief money. Although most qualified taxpayers have received their credit payments, the Recovery Rebate Credit also chases those who left it blank or put $0 on the 2021 return.
Eligible recipients would also be paid up to a maximum of $1,400 per individual. It shall be paid either directly to the bank account specified by the recipient in his or her most recent tax return, or paper checks directly mailed to his or her address of record.
The IRS further directed taxpayers who have yet to file their 2021 returns to do so on or before April 15, 2025, so that they may be able to receive the credit if they are qualified.
This follows the IRS’s commitment to handling concerns brought before it with utmost taxpayer service and ensuring that those who qualify use any available relief. Further guidance and help are available online.
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