$1,400 Stimulus Automatic Payment – How It Works and What You Need to Know

The Internal Revenue Service (IRS) has identified over 1 million taxpayers who missed out on claiming the Recovery Rebate Credit on their 2021 tax returns. In response, the IRS is now distributing approximately $2.4 billion in special payments to ensure eligible individuals receive the stimulus funds they were entitled to.

Here’s what you need to know about these payments and how the IRS is handling this process.

Recovery Rebate Credit

The Recovery Rebate Credit was introduced as part of the government’s Covid-19 relief measures. It allowed individuals to claim unpaid portions of their Economic Impact Payments (EIPs), commonly known as stimulus checks. These payments were issued in three rounds during the pandemic and were distributed by the IRS and the U.S. Department of the Treasury.

However, IRS Commissioner Danny Werfel acknowledged that internal reviews revealed approximately 1 million taxpayers failed to claim the credit despite being eligible. Many mistakenly left the relevant field blank or entered “$0” on their 2021 tax returns.

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Automatic Distribution

The IRS has taken proactive measures to simplify the process for taxpayers. Instead of requiring individuals to file amended returns, the IRS is automatically issuing payments to those identified as eligible.

• Direct Deposit: Taxpayers with a registered bank account on their 2023 tax return should have already received a direct deposit.
• Checks by Mail: For those receiving refunds via check, payments will arrive by the end of January 2025 at the address the IRS has on file.

Werfel emphasized that this automatic approach minimizes administrative burdens and ensures eligible taxpayers receive their refunds without unnecessary delays.

Who Is Eligible

Eligible taxpayers are those who:

• Filed a 2021 tax return but did not claim the Recovery Rebate Credit.
• Were eligible for one or more rounds of the Economic Impact Payments but did not receive them.

The payments, which can be up to $1,400 per individual, are intended to cover missed stimulus funds from the pandemic-era relief programs.

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Taxpayers

For most taxpayers, no action is required to receive the payment. The IRS has already identified eligible individuals through its internal system.

What You Should Know:

• If your banking information is updated in the IRS system, you should check for a direct deposit.
• If your refund is mailed, ensure the IRS has your current address. If necessary, update your address with Form 8822.

Why This Matters

This effort highlights the IRS’s commitment to ensuring taxpayers receive their full entitlements, especially for those who may have missed out due to the complex filing requirements of the Recovery Rebate Credit. The initiative reflects the importance of reviewing tax returns carefully, as even small errors can lead to missed benefits.

By addressing these oversights, the IRS is helping millions of Americans access much-needed financial support, even years after the initial stimulus payments were issued.

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