About one million taxpayers who were eligible for a pandemic-era tax credit in 2021 but did not claim it can expect a lump sum from the Internal Revenue Service in the coming weeks.
The I.R.S. announced on Friday that it would start sending automatic payments of up to $1,400 to those who qualified for the 2021 Recovery Rebate Credit but did not properly claim it on their tax return. The agency estimates it will send about $2.4 billion out to taxpayers by the end of January.
Danny Werfel, the I.R.S. commissioner, said the payments came after the agency reviewed its internal data and noticed that about a million taxpayers overlooked the “complex credit” when filing in 2021. He said in a statement that taxpayers would not be required to amend their filings and would receive their payments automatically.
Here’s what you need to know.
Who qualifies for the credits
The 2021 Recovery Rebate Credit was meant for those who did not receive a third stimulus check distributed by the federal government after the coronavirus pandemic shutdowns.
Those who never claimed the credit on their 2021 tax returns but were eligible at the time will receive a payment from the I.R.S. within the next month. Single taxpayers who did not claim any dependents on their 2021 tax returns and made less than $80,000 that year are eligible for at least some, if not all, of the $1,400 payment.
If married taxpayers filed a joint return, they must have made less than $160,000 in combined income to claim some or all of the tax credit. Those who made less than $112,500 and filed as the head of their household are also eligible.
If you were claimed as a dependent in 2021, you do not qualify for the special I.R.S. payment.
The maximum credit an individual can receive from the tax credit is $1,400. Married couples who filed joint returns and were both eligible, as well as taxpayers who claimed dependents who also qualified, are eligible for payments of up to $1,400 per person.
How can you claim your cash?
Those who meet the income threshold and filed a tax return in 2021 can expect the money to be automatically paid to their bank accounts listed on their 2023 tax returns or to their most recent address on record. If you closed the bank account listed on your 2023 tax returns, the money will go to your address.
All payments from the I.R.S. should be made by late January. The eligible recipients will also receive a separate letter from the I.R.S. to notify that the payment has been made.
The amount paid will vary depending on each household’s income and dependents, among other factors.
If you did not file your 2021 tax returns, you must file by April 15, 2025, to receive the special payment. Those who did not have any income or minimal income that year are still required to file their returns.
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