IRS Discover Error: Who’s Eligible for Up to $1,400?

Approximately 1 million taxpayers are in for a surprise this holiday season. The IRS has discovered an error affecting individuals who failed to claim a Recovery Rebate Credit on their 2021 tax returns. As a result, eligible taxpayers will automatically receive special payments of up to $1,400 in the coming weeks.

What’s the Reason for These Payments?

The IRS is distributing about $2.4 billion to taxpayers who missed one of the COVID stimulus payments or received less than the full amount. People who were eligible for the credit but didn’t claim it on their 2021 tax return will receive the payment.

Am I Eligible for a Payment?

The likelihood of receiving a check is relatively low, as most taxpayers eligible for the federal stimulus payments have already received them. However, if you filed a 2021 tax return but left the data field for the Recovery Rebate Credit blank or filled it out as $0 when you were eligible, you might be receiving a payment.

How Will This Work?

Eligible taxpayers don’t need to take any action. The payments will be sent out automatically this month and should arrive by direct deposit or check by late January 2025. They’ll be sent to the bank account listed on the taxpayer’s 2023 return or to the address the IRS has on file.

Additional Information

• Payments will vary, but the maximum amount will be $1,400 per individual.
• The IRS has posted information online about eligibility and how the payment was calculated.
• The IRS plans to send separate letters to eligible taxpayers notifying them of the special payment.

What If I Haven’t Filed My 2021 Tax Return Yet?

You still might be able to receive the money. Taxpayers need to file a tax return and claim the Recovery Rebate Credit by the April 15, 2025 deadline, even if any income from a job, business, or other source was minimal or nonexistent.

Background on COVID Stimulus Payments

There were three rounds of payments to households impacted by the pandemic, totaling $814 billion. The IRS based the amounts taxpayers received on their income, tax filing status, and number of children or qualifying dependents.

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