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Published 23:13 IST, December 22nd 2024

US Taxpayers to Receive Up to USD 1,400 from IRS: Who Qualifies and Why Now?

Around 1 million taxpayers will receive special payments up to USD 1,400 from the IRS in the coming weeks, via direct deposit or paper check.

The decline follows a total reduction of $8.2 billion over the three preceding weeks, | Image: Pixabay

Washington: Around 1 million taxpayers will receive special payments of up to USD 1,400 from the IRS in the coming weeks, either via direct deposit or paper check.

The IRS announced it's distributing about USD 2.4 billion to taxpayers who missed claiming the Recovery Rebate Credit on their 2021 returns, for those who missed or received less COVID stimulus payments.

“Looking at our internal data, we realised that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” IRS Commissioner Danny Werfel said in a statement.

Here's more on the unexpected cash: The likelihood of receiving a check is low, as the IRS stated most eligible taxpayers for the federal stimulus, or Economic Impact Payments, have already received them.

The special payments announced by the IRS are being sent to those taxpayers who filed a 2021 tax return but left the data field for the Recovery Rebate Credit blank or they filled it out as USD 0 when they were actually eligible for the credit.

Here's How it will work

Eligible taxpayers don't have to take any action. The payments will go out automatically this month and should arrive by direct deposit or check by late January 2025. They'll be sent to the bank account listed on the taxpayer's 2023 return or to the address IRS has on file.

Payments will vary but the maximum amount will be USD 1,400 per individual. The IRS has posted information online about eligibility and how the payment was calculated.

IRS plans to send separate letters to eligible taxpayers notifying them of the special payment.

What if I haven't filed my 2021 tax return yet? You still might be able to receive the money. However, taxpayers need to file a tax return and claim the Recovery Rebate Credit by the April 15, 2025 deadline, even if any income from a job, business or other source was minimal or nonexistent, according to IRS.

How many rounds of COVID stimulus payments were there? There were three rounds of payments to households impacted by the pandemic, totalling USD 814 billion. IRS based the amounts that taxpayers received on their income, tax filing status and number of children or qualifying dependents.

In March 2020, eligible individuals received up to USD 1,200 per income tax filer and USD 500 per child under the CARES Act. In December 2020, eligible individuals received up to USD 600 per income tax filer and USD 600 per child under the Consolidated Appropriations Act. In March 2021, eligible individuals received up to USD 1,400 per income tax filer and USD 1,400 per child under the American Rescue Plan Act.

(with agency inputs)

Updated 23:13 IST, December 22nd 2024

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