The IRS is set to distribute $2.4 billion in automatic stimulus checks to one million taxpayers, catching many by surprise.
At a Glance
- IRS to distribute $2.4 billion in stimulus checks to one million eligible taxpayers
- Payments of up to $1,400 per person will be sent automatically
- Eligible taxpayers will receive payments by late January via direct deposit or paper check
- No action required from taxpayers; IRS will notify eligible individuals by letter
IRS Identifies Overlooked Tax Credits
The Internal Revenue Service has announced a significant initiative to distribute approximately $2.4 billion in stimulus checks to one million taxpayers who missed out on claiming the 2021 Recovery Rebate Credit. This effort comes as part of the agency’s ongoing commitment to ensure eligible Americans receive the financial support they are entitled to, even if they initially overlooked the opportunity.
IRS Commissioner Danny Werfel explained the reasoning behind this automatic distribution, stating, “Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible.”
Can you believe the government is still handing out “free” money?
Automatic Payments Simplify Process
In a move designed to streamline the process and reduce administrative burdens, the IRS has opted to issue these payments automatically. This approach eliminates the need for eligible taxpayers to file amended returns or take any additional action to receive their due funds.
“To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it,” Commissioner Werfel said.
This decision reflects the IRS’s commitment to efficiency and taxpayer convenience, ensuring that those who qualify for the credit receive it with minimal hassle.
Eligibility and Distribution Details
The Recovery Rebate Credit is targeted at individuals who did not receive the full amount of Economic Impact Payments during the height of the COVID-19 pandemic. Eligibility for these payments is based on income thresholds from the 2021 tax year. Single taxpayers with incomes under $80,000, married couples filing jointly with combined incomes under $160,000, and heads of household with incomes under $112,500 may qualify for the payment.
Eligible taxpayers can expect to receive up to $1,400 per person, with payments scheduled to be distributed by late January. The IRS will use the bank account or mailing address provided on the taxpayer’s most recent tax return to send the funds. Those receiving direct deposits can anticipate faster access to their funds compared to those receiving paper checks.
No Action Required from Taxpayers
One of the key aspects of this initiative is that eligible taxpayers do not need to take any action to receive their payments. The IRS will automatically process and distribute the funds based on the information already in their system. This automation not only speeds up the process but also ensures that taxpayers who may be unaware of their eligibility still receive the benefit.
To keep taxpayers informed, the IRS will send notification letters to those who are eligible for these payments. These letters will provide important information about the payment and what recipients can expect.
For those who have not filed a 2021 tax return but believe they may be eligible for the Recovery Rebate Credit, there is still time to act. The IRS has set a deadline of April 15, 2025, for individuals to file and claim this credit.
