The IRS is set to distribute approximately $2.4 billion to around 1 million taxpayers who failed to claim the recovery rebate credit on their 2021 tax returns. This credit, designed to assist individuals who did not receive economic impact payments during the COVID-19 pandemic, amounts to $1,400 for eligible individuals and $2,800 for married couples filing jointly, plus an additional $1,400 for each qualifying dependent. The credit begins to phase out at certain income thresholds, which vary based on filing status. For instance, single filers with an adjusted gross income (AGI) of $77,500 may receive a reduced credit. Taxpayers who filed their 2021 returns will automatically receive the credit without needing to take any action, with payments expected to be processed by late January 2025. The IRS will use the bank details from the 2023 tax return or mail checks to the address on file.
Read the full article here.