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The Internal Revenue Service (IRS) has announced plans to eliminate automatic payments for eligible taxpayers who did not claim the Acquisition Discount Credit on their 2021 tax returns.
IRS officials announced the move on December 20 and said the payments will be made automatically before the end of December. It follows an analysis by the agency that found nearly 1 million taxpayers did not claim the pandemic-related credit on their 2021 return when they were eligible.
“The IRS continues to work hard to make improvements and help taxpayers,” IRS Commissioner Danny Werfel said in a statement. “These payments are an example of our commitment to go the extra mile for taxpayers.”
“When we looked at our internal data, we realized that a million taxpayers neglected to claim this complicated credit when they really deserved it,” said Werfel. “To reduce headaches and get this money to the right taxpayers, we’re making these payments automatic, meaning these people won’t have to go through the extensive process of filing an amended return to get it.”
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The IRS is sending Recovery Rebate Credit payments to eligible taxpayers this month. ((Photo by Spencer Platt/Getty Images) / Getty Images)
Most taxpayers who were eligible for the Acquisition Discount Credit or one or more renewal payments (EIP), also known as renewal payments, have already received those credits and payments. Credit payments and incentives were created in response to the COVID-19 pandemic.
Special fees announced by the IRS are for qualified taxpayers who filed a 2021 tax return with the Recovery Discount Credit data field left blank or filled in as $0 when the taxpayer is, in fact, eligible for the credit.
Taxpayers who did not claim the credit, or part of it, on their 2021 tax return are expected to receive payments from the IRS in late January 2025. The payment will be sent to the bank account listed on the taxpayer’s 2023 tax return. or at their address of record.
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The Commissioner of the Internal Revenue Service, Daniel Werfel, said the agency found that about a million taxpayers who were eligible for this discount did not claim it on their 2021 tax returns. ((Tom Williams/CQ-Roll Call, Inc via Getty Images) / Getty Images)
The amounts of Cashback Loans that are scheduled to be paid vary based on several factors, although the maximum payment is $1,400 per person. The IRS estimates that the total amount of payments to be distributed is approximately $2.4 billion.
The IRS will send a letter to taxpayers receiving their 2021 Recovery Rebate Credit payment. If a taxpayer has closed the bank account associated with their 2023 tax return since filing, taxpayers do not need to take action as the bank will return the payment to the IRS, which will re-deposit the refund to the taxpayer’s address of record.
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There is also a deadline closer to the first quarter of 2025 for taxpayers who have not yet filed their 2021 tax returns, as they must file this return by April 15, 2025, in order to receive the Discounted Return Credit they are eligible for. .
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