Surprise Windfall: IRS Notifies 1 Million Taxpayers of Unclaimed Payments

CNN — Who couldn’t use a little extra cash in January without lifting a finger?

A million taxpayers will soon receive letters from the IRS notifying them of unclaimed funds tied to the 2021 Recovery Rebate Credit. This credit was designed for individuals who missed one or more pandemic-era stimulus payments, also known as Economic Impact Payments.

These payments exemplify our commitment to going the extra mile for taxpayers. Upon reviewing internal data, we identified one million individuals who were eligible but didn’t claim this complex credit, IRS Commissioner Danny Werfel stated. To simplify the process and ensure eligible taxpayers receive their payments, we are making these payments automatic, eliminating the need to file an amended return.

Eligible individuals could receive up to $1,400 per person, plus an additional $1,400 for each qualifying dependent. Payment amounts depend on the taxpayer's 2021 income and other factors. Generally, eligibility requires an adjusted gross income below $160,000 for married couples filing jointly, $120,000 for heads of household, or $80,000 for single filers.

This refundable credit allows taxpayers to receive a payment even if they had no federal income tax liability in 2021.

The IRS expects most payments—totaling approximately $2.4 billion—to be distributed by late January, either via direct deposit or paper check, based on the taxpayer's refund preferences. Payments will be sent to the bank account or address provided on the taxpayer’s 2023 return. If a bank account is closed, the payment will be returned to the IRS and reissued to the address on file.

The IRS also urged individuals who have yet to file their 2021 tax return to do so by April 15, 2025, to claim the Recovery Rebate Credit and any other eligible refunds.