Some 1 million people are eligible for refunds of up to $1,400 and, according to the IRS, the money will appear in their accounts without an actions on their part.
The money goes to people who did not claim the Recovery Rebate Credit on their 2021 tax returns. The RRC is a refundable credit for individuals who did not receive one or more Economic Impact Payments - commonly known as stimulus payments - issued amid the COVID-19 pandemic.
"Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible. To minimize headaches and get this money to eligible taxpayers, we're making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it," IRS Commissioner Danny Werfel said in a statement.
Exact amounts will depend on several factors but maximum amount is $1,400 per individual. In all, the IRS is sending out about $2.4 billion.
The payments are only going to taxpayers who were eligible for the credits in 2021 but either left the information blank or filled it out as $0 when they were in fact eligible.
Eligible taxpayers don't have to do anything to receive the payments. They will go out automatically in December and should arrive by late January 2025. They will be automatically deposited if you filed your return electronically and provided banking information. If you didn't provide direct deposit information, you will receive a paper check.
Taxpayers who are due money will also receive a separate letter notifying them of their payment.
If the bank account tied to the return is closed, the IRS said the direct deposit will be returned by the financial institution and reissued as a paper check to the address on record.
People who haven't filed their 2021 tax returns could be eligible as well, the IRS said.
"Eligible taxpayers who did not file must file a tax return to claim a recovery rebate credit, even if their income from a job, business or other source was minimal or non-existent," the IRS said in a statement.
People who haven't filed for 2021 face an April 15, 2025 deadline to claim the credit and any other refund they might be owed.
"Eligible taxpayers who did not file must file a tax return to claim a recovery rebate credit, even if their income from a job, business or other source was minimal or non-existent," the agency says on its website.