A million people will likely be getting checks from the IRS in the approaching weeks, the agency announced Friday. The payments, value as much as $1,400 per person, are an effort to be certain that everyone receives the federal pandemic stimulus money they were eligible for.
The payments are for the Recovery Rebate Credit that Americans could claim on their 2021 tax returns. Eligible individuals needn’t do anything to gather their money. Recipients can expect to receive either electronic payments or paper checks by late January 2025, the IRS said. In total, the agency is sending out $2.4 billion in payments.
Who’s eligible for these payments?
Taxpayers eligible for the 2021 Recovery Rebate Credits are those that were eligible for but didn’t receive the third pandemic-era stimulus payment. (Earlier, the IRS issued the same credit, the 2020 Recovery Rebate Credit, which was a credit for individuals who were eligible for but didn’t receive one or each of the primary two rounds of stimulus payments.)
Most eligible taxpayers already received this payment, which was a refundable credit on 2021 taxes, in line with the IRS. (“Refundable” means you could get the cash even when you don’t owe any income taxes once you file. “Nonrefundable” implies that a credit is applied against taxes you owe, but you don’t get anything extra when you don’t owe the IRS come April.) The IRS has issued announcements before to lift awareness of these unclaimed stimulus funds, urging eligible taxpayers to file for them. The agency has an online fact sheet with more details about general eligibility for each iterations of this credit.
How will the payments be distributed?
The IRS says it is going to notify eligible taxpayers by mail that they’ll expect a payment. It would send electronic payments and paper checks to the checking account listed on a taxpayer’s 2023 tax return, or address on file with the agency, respectively. Eligible individuals who’ve closed the account on their 2023 return will still get their payment. The bank will return the payment and the IRS said it is going to send out the payment via mail.
Individuals who didn’t owe any taxes or file a tax return in 2021 is likely to be eligible for this credit payment, but they should submit their 2021 return by April 15, 2025 so as to claim the credit, together with some other refund for which they is likely to be eligible, the IRS said.
Only a reminder: You don’t have to pay anyone to file a tax return. The IRS has many resources available for taxpayers eligible to file their taxes without cost, including a program called IRS Direct File, which filers with easy returns in a handful of states can use. A much bigger program is IRS Free File, for which hundreds of thousands of taxpayers are eligible inside certain income limits ($79,000 for people filing their 2023 taxes).
