Surprise IRS payments go to tax filers

CNN
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Who couldn’t use a little extra cash in January without having to lift a finger?

One million tax filers will soon receive a letter from the IRS stating that they have money coming to them because they were eligible to receive the 2021 Recovery Rebate Credit but did not claim it on their 2021 federal tax return.

The recovery rebate credit was intended for people who, during the pandemic, did not receive one or more stimulus payments, known as economic impact payments.

“These payments are an example of our commitment to going the extra mile for taxpayers. When we looked at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” said IRS- Commissioner Danny Werfel said in a statement. “To minimize headaches and get this money to eligible taxpayers, we are making these payments automatic, meaning these people will not be required to go through the extensive process of filing a modified feedback to receive it.”

Payment amounts can be as high as $1,400 per person (plus up to $1,400 per 2021 income and other factors. But generally, you wouldn’t be eligible for any part of the credit unless your 2021 adjusted gross income was below $160,000 if you were married filing jointly; under $120,000 if you filed as head of household; or under $80,000 if you were a single filer.

It’s a refundable credit, meaning you could receive a refund even if you had no federal income tax liability for 2021.

The agency said the payments, which will total about $2.4 billion, should be received by the end of January in most cases.

They will be made either by direct deposit or by paper check, depending on the branch’s preferred method of obtaining reimbursement. “The payment will be sent to the bank account listed on the taxpayer’s 2023 tax return or to the address of record,” the IRS said.

If you are eligible to receive a payment but have closed your bank account since you filed your 2023 tax return, the agency added, “The bank will return the payment to the IRS and the refund will be reissued to the address of record.”

The agency also encouraged anyone who has not yet filed their 2021 tax return to do so by April 15, 2025, to claim the recovery discount credit, if eligible, plus any other refunds they may be owed.