BIG January 2025 Stimulus Payments: Which Deposits Could Be Heading Your Way to Kickstart the New Year?

The Internal Revenue Service (IRS) has announced a plan to issue automatic payments to eligible taxpayers who failed to claim the Recovery Rebate Credit on their 2021 tax returns. This initiative aims to provide financial relief to individuals who were entitled to the credit but did not claim it. Payments, which will begin in December 2024, are expected to reach taxpayers by the end of January 2025, requiring no additional action from recipients.

How Payments Will Be Distributed

Eligible individuals will receive payments either via direct deposit to their bank accounts or by mailed paper checks. Taxpayers will also receive a notification letter from the IRS confirming the payment.

“The IRS continues to prioritize helping taxpayers by streamlining processes and identifying those who missed out on important credits,” said IRS Commissioner Danny Werfel. He noted that internal data revealed nearly one million taxpayers overlooked claiming the Recovery Rebate Credit, a refundable credit designed for individuals who missed one or more Economic Impact Payments (stimulus checks).

To avoid the need for an amended tax return, the IRS is automating the payment process. The maximum amount available is $1,400 per individual, with total payments estimated at $2.4 billion.

Who Qualifies for These Payments?

The Recovery Rebate Credit applies to individuals who did not receive the full amount of their Economic Impact Payments. Taxpayers who filed a 2021 tax return but left the Recovery Rebate Credit field blank or reported $0 are eligible to receive these payments. For those who have not yet filed their 2021 tax returns, there is still an opportunity to qualify. The IRS has set an April 15, 2025 deadline for taxpayers to file their 2021 returns and claim the credit. This includes individuals with minimal or no income who might still be eligible for a refund.

Steps to Ensure Payment Delivery

Payments will be sent to the bank account or address listed on the taxpayer’s 2023 tax return. In cases where a bank account has been closed, the IRS will reissue the payment as a paper check to the address on record.

Taxpayers who did not file a 2021 tax return must file one to claim the Recovery Rebate Credit. The IRS encourages individuals to act promptly to avoid missing the April 2025 deadline.