As many as one million taxpayers will receive a "special" year-end gift from the IRS as the agency deposits pandemic-era stimulus checks worth a total of $2.4 billion directly in their bank deposits.
The automatic deposits will be issued "later this month" and should arrive "in most cases" by late January 2025, the agency said. They will be paid to eligible taxpayers who did not claim the 2021 recovery rebate credit on their tax return for themselves and their dependents, worth up to $1,400 per individual.
"Looking 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 in a statement. "To minimize headaches and get this money to eligible taxpayers, we're making these payments automatic."
Exactly how much each taxpayer receives will depend on a number of factors, including their income, whether or not they are married, and the total number of dependents. For example, the payment amount started to phase out for individuals who earned an adjusted gross income (AGI) of more than $75,000 and couples who earned an AGI of more than $150,000. A married couple with three children who had an AGI of $149,000 would receive $5,600.
The IRS is sending these direct deposits to eligible taxpayers who did not receive the original payment and did not claim it on their 2021 tax return. Recipients should not have to take any action to receive the payments. If the IRS does not have the taxpayer's bank account information -- based on their 2023 tax return -- it will send the payment via paper check in the mail.
Throughout the early days of the pandemic, the federal government issued three different economic impact payments to help struggling individuals and families. The first was valued up to $1,200 per filer and $500 per dependent; the second was worth up to $600 per filer and $600 per dependent; and the third was worth $1,400 per filer and $1,400 per dependent.
The third payment, part of President Joe Biden's $1.9 trillion American Recovery Plan, signed into law in March 2021. In total, American households received more than 476 million pandemic relief payments worth $814 billion.
Each iteration of the stimulus check differed in who was eligible to receive it, though they were generally aimed at lower- and middle-income individuals and households. The third check expanded the definition of dependent from the first and second rounds of payments to include college students, disabled adults, and elderly Americans.