The Internal Revenue Service (IRS) is actively distributing approximately $2.4 billion to taxpayers who missed out on their COVID-19 stimulus payments. By the end of January, nearly one million individuals will receive special payments of up to $1,400. This initiative targets those who did not claim a Recovery Rebate Credit on their 2021 tax returns. This credit is designed for individuals who did not receive one or more Economic Impact Payments (EIP), commonly known as stimulus payments.

According to IRS Commissioner Danny Werfel, "Upon reviewing our internal data, we realized that a million taxpayers overlooked claiming this complex credit despite being eligible." This revelation has prompted the IRS to take corrective action, ensuring that eligible individuals receive the funds they are entitled to without additional hassle.

One such beneficiary is Ginny Bultman, a 61-year-old resident of Colorado. Bultman and her husband did not receive a stimulus payment in 2021. After learning about the IRS's recent efforts, she discovered her eligibility for the Recovery Rebate Credit. Shortly thereafter, she received her check in the mail, describing it as "a pleasant surprise." The Bultman family ultimately received three delayed stimulus payments, totaling $4,200 by the end of December.

For those wondering if they qualify, the IRS is sending these special payments to taxpayers who filed a 2021 tax return but left the Recovery Rebate Credit field blank or entered $0, despite meeting the eligibility criteria. The payments will vary, with a maximum amount of $1,400 per individual. In total, the IRS will distribute approximately $2.4 billion to those who did not claim the credit on their 2021 tax returns.

The IRS has made information available online regarding eligibility and how the payment amounts were calculated. The Recovery Rebate Credit is a refundable credit for individuals who did not receive Economic Impact Payments during 2020 and 2021. This initiative follows the IRS's review of internal data, which revealed that many eligible taxpayers who filed a 2021 tax return did not claim the credit.

To streamline the process and minimize headaches, the IRS is making these payments automatic. This means eligible individuals will not need to go through the lengthy process of filing an amended return to receive their funds. "To minimize headaches and deliver this money to eligible taxpayers, we're making these payments automatic," Werfel stated.

If you qualify for the Recovery Rebate Credit, no action is required on your part. The IRS plans to send letters to eligible taxpayers, notifying them of the special payment. These payments will be sent automatically this month and should arrive via direct deposit or check by the end of January. They will be sent to the bank account listed on the taxpayer's 2023 tax return or the address the IRS has on file.

Even if you haven't received your payment yet, there's still time. Taxpayers need to file a tax return and claim the Recovery Rebate Credit before the deadline on April 15, 2025, even if their income from a job, business, or other source was minimal or nonexistent, according to the IRS.

There were three rounds of payments to households affected by the pandemic, totaling $814 billion. The IRS based these payments on the amounts taxpayers received in income, their tax filing status, and the number of qualifying children or dependents. In March 2020, eligible individuals received up to $1,200 per person who filed an income tax return and $500 per child under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

In December 2020, eligible individuals received up to $600 per tax filer and $600 per child under the Consolidated Appropriations Act. In March 2021, eligible individuals received up to $1,400 per tax filer and $1,400 per child under the American Rescue Plan Act. These payments were crucial in providing financial relief during the pandemic, and the IRS is committed to ensuring that all eligible individuals receive their due funds.