The IRS is offering a holiday bonus of up to $1,400 for certain taxpayers, with about 1 million people expected to receive this special payment by the end of next month. This is the result of a recent review by the IRS, which found that many taxpayers failed to claim a COVID-era tax credit on their 2021 federal returns.
These automatic payments will be issued without any action required from the recipients. Most eligible taxpayers received the credit when it was first offered in 2020 and 2021, but some missed out, likely due to confusion about the complex tax break.
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The IRS is now correcting this oversight and expects to distribute around $2.4 billion in payments. The agency discovered that many taxpayers had filed their returns but did not claim the credit they were eligible for. This decision to provide the payments automatically will spare recipients the need to file amended returns.
IRS Commissioner Danny Werfel explained, “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.”
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