IRS to Send $1,400 Unclaimed Stimulus Checks to 1 Million Taxpayers: Eligibility, Payment Process, and Deadlines

The Internal Revenue Service (IRS) has announced plans to distribute unclaimed stimulus checks of up to $1,400 to approximately 1 million taxpayers who did not claim the Recovery Rebate Credit on their 2021 tax returns. This initiative aims to rectify oversight and ensure eligible individuals receive the financial support they are entitled to.

Background on Recovery Rebate Credit

The Recovery Rebate Credit was designed to provide financial relief to individuals who did not receive the full amount of their pandemic stimulus payments, known as Economic Impact Payments (EIPs). The credit was part of the American Rescue Plan Act of 2021 and was intended to help those who were eligible for stimulus payments but did not receive them or received less than they were entitled to[1][2].

Eligibility Criteria

To be eligible for these payments, taxpayers must have filed their 2021 tax returns but left the 'Recovery Rebate Credit' field blank or filled it out as $0 despite being eligible for the money. The IRS will automatically send out the payments to those who meet these criteria, eliminating the need for taxpayers to file amended returns.

Key Eligibility Requirements:

• U.S. Citizenship or Residency: Taxpayers must have been U.S. citizens or U.S. resident aliens in 2021.
• Not a Dependent: Taxpayers cannot have been claimed as dependents on another person's tax return for 2021.
• Social Security Number: Taxpayers must have had a Social Security number issued before the due date of their 2021 tax return (including extensions)[1][4].

Payment Process

The IRS will disburse the payments starting this month, with most recipients expected to receive their funds by late January 2025. Payments will be made either through direct deposit to the bank account listed on the taxpayer's 2023 tax return or by paper check if the bank account has been closed or not listed.

Payment Details:

• Direct Deposit: Payments will be deposited into the bank account listed on the taxpayer's 2023 tax return.
• Paper Checks: If the bank account has been closed or not listed, payments will be made by paper check.
• Notification Letters: Recipients will receive notification letters informing them about their payments and how the amounts were calculated[2][3].

Key Pieces of Information

1. Eligibility Check: Taxpayers can determine if they are eligible by checking their 2021 tax return. If the Recovery Rebate Credit field is blank or filled out as $0, they may be eligible for the payment.
2. Automatic Payments: The IRS will send out the payments automatically, eliminating the need for taxpayers to file amended returns.
3. Notification Letters: Recipients will receive notification letters informing them about their payments and how the amounts were calculated.
4. Deadline for Filing 2021 Taxes: If a taxpayer has not filed their 2021 tax return yet, they can still be eligible for the refund if they file by April 15, 2025[1][2][3].

Actionable Steps

• Check Your Tax Return: Review your 2021 tax return to see if you left the Recovery Rebate Credit field blank or filled it out as $0.
• No Action Required: If you are eligible, no further action is needed. The IRS will handle the payment process automatically.
• File 2021 Taxes if Necessary: If you haven’t filed your 2021 tax return yet, do so by April 15, 2025, to claim the Recovery Rebate Credit.

Expert Insights

Tax professionals emphasize the importance of reviewing 2021 tax returns to ensure eligibility for the Recovery Rebate Credit. "It's crucial for taxpayers to check their 2021 tax returns and understand the eligibility criteria for the Recovery Rebate Credit. This initiative by the IRS is a significant step in ensuring that eligible individuals receive the financial support they are entitled to," notes a tax expert.

Conclusion

The IRS's initiative to distribute unclaimed stimulus checks of up to $1,400 to approximately 1 million taxpayers underscores the agency's commitment to helping taxpayers by rectifying oversight and ensuring eligible individuals receive the financial support they are entitled to. By following these steps, taxpayers can potentially receive up to $1,400 in unclaimed stimulus funds.

Additional Resources:

• IRS Website: For more information on the Recovery Rebate Credit and eligibility criteria, visit the IRS website.
• Tax Professional Guidance: Consult with a tax professional for personalized advice on claiming the Recovery Rebate Credit.

References:

[1] https://www.investopedia.com/recovery-rebate-credit-5090493 [2] https://www.aarp.org/money/taxes/info-2020/irs-timeline-to-send-stimulus-funds.html [3] https://www.kiplinger.com/taxes/602269/what-is-the-recovery-rebate-credit [4] https://www.expattaxonline.com/what-is-the-deadline-to-claim-stimulus-check/