The next few weeks may be your luck break. If your wallet has been stretched thin by the holiday celebrations in the past month, you may just receive a late Christmas present from the IRS. Within the next few weeks, nearly one million tax payers are set to receive payments of up to $1,400. If you qualify, the money will either be directly deposited into your bank account or will be sent via check in the mail.
$1,400 if you match this qualifying criteria
The IRS has announced it will distribute approximately $2.4 billion to taxpayers who overlooked claiming the Recovery Rebate Credit on their 2021 tax returns. This credit was available to those who:
- Missed a COVID stimulus payment
- Received less than the full amount of their stimulus payment
However, the IRS revealed on Friday that many eligible individuals had not claimed the credit, despite being entitled to it. “Looking at our internal data, we realized that one million taxpayers overlooked claiming this complex credit when they were actually eligible,” IRS Commissioner Danny Werfel said.
How will I know if I am eligible?
If you are eligible to receive the payment from the IRS, they will inform you in waiting by sending you a letter. There is no further action needed to be taken on your part as the IRS has taken the initiative to confirm who is eligible or not. Once they have identified tax payers who are eligible to receive the payment due to missing the 2021 Recovery Rebate Credit, the payment will automatically be refunded to you. Payments are expected to have been completed their distribution this month.
If you never filed your 2021 tax return, you may also still be able to claim for the rebate. If you fall into this camp, you must file a tax return and claim the Recovery Rebate Credit by the April 15, 2025 deadline, even if your income from employment, business, or other sources was low or nonexistent, according to the IRS.
New changes for economic policy in 2025
Next year, ongoing debates surrounding the future of Social Security are expected to prompt significant policy changes. With concerns about the program’s sustainability, especially as the population ages, lawmakers may explore reforms such as raising the retirement age or adjusting benefits to ensure long-term viability. These discussions are likely to gain momentum under the incoming Trump administration, which is expected to focus on addressing fiscal challenges.
One notable piece of legislation being introduced is the new Fairness Act, aimed at ensuring a more equitable distribution of Social Security benefits, especially for workers in lower-income brackets or those with nontraditional career paths. Alongside Social Security reforms, other economic shifts under the Trump administration are expected to include a continuation of tariff policies.
These tariffs are likely to impact trade relations, particularly with China and other key global partners, potentially driving up costs for consumers and businesses. The administration may also prioritize tax cuts and deregulation as part of its broader economic agenda. These changes could have a profound effect on both domestic economic growth and global trade dynamics, making 2025 a crucial year for U.S. economic policy. In addition to these changes, talks of changes to the future of stimulus payments are also in the works under the Trump administration.
