IRS Announces New Incentives: The Internal Revenue Service (IRS) has recently revealed new incentives for eligible Americans, including an automatic distribution of stimulus checks for those who missed out on the Recovery Rebate Credit in 2021.
Who Qualifies for the Recovery Rebate Credit?
In 2021, some individuals may have missed claiming the Recovery Rebate Credit, which was tied to the Economic Impact Payments (stimulus checks). If you were eligible for a stimulus payment but didn’t receive it or didn’t claim it on your tax return, you might be getting a check by the end of January 2025.
IRS Commissioner Danny Werfel explained that after reviewing internal data, the agency discovered that one million taxpayers failed to claim this credit despite qualifying. To simplify the process, the IRS has decided to automatically distribute payments to those eligible, bypassing the need for an amended tax return.
What You Need to Know About the Stimulus Payments
If you missed out on the Recovery Rebate Credit, the IRS will automatically send out payments to eligible individuals. The total national distribution is $2.4 billion, and recipients can expect about $1,400 in their checks.
These checks will be sent by late January 2025, either as physical checks to the address on file or through direct deposit based on your 2023 tax return. If you’re eligible, you should also receive a separate letter informing you of your payment.
The IRS also noted that if you haven’t claimed the Recovery Rebate Credit yet, you still have time. You can claim it by filing your 2021 tax return by April 15, 2025, and potentially receive a payment.
How to Track Your Past Tax Returns and Refunds
If you’re wondering about past tax returns or refunds, the IRS provides tools to help you track them. The Where’s My Refund tool allows you to see your refund status for the last two years, as long as you log into your IRS account. You can view payment history, your outstanding balance, recent tax return details, and IRS notices.
Additionally, the IRS2Go mobile app provides another way to track your refund status, offering updates on whether your return has been processed. To use the app, you’ll need your Social Security number, filing status, and refund amount. Check the status daily since the IRS updates it overnight.
Potential Changes Ahead: IRS Funding Challenges
As political shifts loom, there is growing concern about the future of IRS funding. Under a potential Trump administration, the IRS is expected to face significant budget cuts. The agency has already lost $20 billion in funding, and more cuts may follow, which could further strain its ability to enforce tax laws and collect unpaid taxes.
Tax evasion remains a major issue, especially among businesses with the highest incentives to avoid taxes. With fewer resources for enforcement, the burden on honest taxpayers increases, and unpaid taxes are expected to rise, disproportionately affecting self-employed individuals, cash-based businesses, and large corporations.