As a part of the American rescue plan, many of the individuals who were entitled to payments but did not receive, will be receiving $1,400 from the IRS. In a surprising and welcome development for many Americans, the Internal Revenue Service (IRS) is giving money to the taxpayers.
The IRS has announced that it is issuing $1,400 stimulus payments to approximately one million taxpayers in 2025.
These payments are part of a correction to the 2021 Recovery Rebate Credit. There are several individuals who were entitled to this amount but never received anything due to human errors, such as filing issues or omissions on their tax returns..
The American rescue plan has covid-19 relief strategy under its umbrella. The Recovery Rebate credit was a part of this strategy. This was intended to provide financial support to citizens during the time of the COVID-19 pandemic.
However, there were many eligible taxpayers who did not get this benefit because either they didn’t file for the credit or made a mistake on their 2021 returns. This left a significant amount of money unclaimed. The IRS has now taken it up and is stepping in to rectify the issue. They will use their records to automatically send payments to those who qualify.
Keep an eye on your mail if you qualified for, but did NOT claim, the Recovery Rebate Credit on your 2021 tax return. 📬
The Recovery Rebate Credit is a refundable credit that you may qualify for if you didn’t receive one (or more) of your stimulus payments. 💸 pic.twitter.com/lOZuWRr2ed
— Ms. Razzle Dazzle (@FinancialFancy) February 25, 2025
Now the question arises, who exactly is eligible?
The IRS will be going through its records and will be looking for those individuals who filed a 2021 tax return but did not claim the credit. There are many cases where people have left the section of the Recovery Rebate Credit line blank, or they have entered 0. This was due to a lack of awareness or confusion regarding the American Rescue Plan.
Those who filed their 2021 return and met this criterion will be getting this payment automatically. If one were eligible for the credit based on their income and dependent status, they should receive the payment automatically. There will be no need for any additional paperwork or an amended return required.
However, to receive the full amount, income thresholds are applicable. To qualify for the full $1,400, the adjusted gross income of single filers must be of $75,000 or less. For heads of household, the threshold is $112,500. Similarly, for married couples filing jointly, it’s $150,000 for those with higher income levels; the credit phases out entirely.
Children or dependents listed on a 2021 tax return may also qualify for an additional $1,400 per dependent.
The IRS is utilizing existing records to deliver payments through three main methods:
- Direct Deposit: These would be directly deposited into the bank account, and it will be the fastest method. If the IRS already has your banking details, either from tax filings or Social Security, this is how your payment will likely be sent.
- Paper Check: People who still pay Social Security and tax returns through checks will most likely receive a check from the IRS. This process will take longer.
- EIP Debit Card: Aside from these two methods, some individuals may receive a prepaid debit card. These cards can be used like a regular debit card for purchases or ATM withdrawals.
