The IRS is distributing stimulus payments to over 1 million taxpayers, and this could provide much-needed relief, especially for Black Americans, who typically experience lower and more fluctuating incomes compared to their white counterparts. The payments come in response to the ongoing economic challenges caused by the COVID-19 pandemic and the rising cost of living.
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Stimulus Payments Could Provide Relief to Those Who Need It Most
In 2023, U.S. Census Bureau data revealed that the median household income for Black Americans stood at $56,490, while white households earned a significantly higher median income of $89,050. The new round of payments could provide some much-needed financial stability to those who are still struggling.
The IRS announced in December that it would distribute approximately $2.4 billion in the form of stimulus checks, with eligible taxpayers potentially receiving up to $1,400 by the end of January 2025.
According to Michael Neal, senior fellow at the Urban Institute’s Housing Finance Policy Center, these payments are particularly important for vulnerable families grappling with higher costs of consumer goods following the economic turmoil of the pandemic. “Hopefully these checks will meet the moment, especially for vulnerable families,” Neal said.
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Stimulus Checks: A Second Chance for Taxpayers Who Missed Out
These payments come as part of the IRS’s efforts to address a gap identified during an internal review. Many eligible taxpayers failed to claim the Recovery Rebate Credit, which is designed to support individuals who didn’t receive or received less than they were entitled to in previous stimulus rounds.
IRS Commissioner Danny Werfel explained, “Looking at our internal data, we realized that 1 million taxpayers overlooked claiming this complex credit when they were actually eligible.” This payment round aims to right those wrongs and ensure that eligible individuals are not left behind.
Who Will Get the Stimulus Check?
This is the third batch of stimulus payments the IRS is distributing, following previous rounds in 2020 and 2021. Taxpayers who did not claim the full Recovery Rebate Credit on their 2021 tax returns will be eligible to receive the stimulus checks now. If you didn’t receive all the stimulus funds you were entitled to or if you missed claiming the credit, you are eligible for this payment.
To qualify for the Recovery Rebate Credit, single individuals must have an adjusted gross income of $80,000 or less. For married couples filing jointly, the threshold is $160,000. If you met these income limits and left the credit section blank or entered “$0” on your 2021 return, you’re likely due for a payment.
How Much Can You Expect to Receive?
The amount of money you’ll receive depends on various factors, including your filing status and whether you have dependents. For example:
- Single filers without dependents could receive up to $1,400.
- Married couples filing jointly could receive up to $2,800.
- If a married couple has two qualifying dependents, they could receive as much as $5,600.
Keep in mind that the amount could be lower depending on your income.
No Action Required: The Stimulus Is Automatic
If you’re eligible for a stimulus check, you don’t need to do anything to receive your money. The IRS will automatically issue the payments without requiring you to amend your tax return. This means no additional paperwork or complicated procedures are necessary.
IRS Commissioner Werfel emphasized that the goal is to make the process as seamless as possible, saying, “To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic.”
When Will the Payments Arrive?
Although the IRS has not specified an exact date, it has confirmed that the stimulus checks should arrive by the end of January. Keep an eye on your bank account, as the money could already be in your account. The payments will be sent either to the bank account listed on your 2021 return or to your address of record. Additionally, the IRS will send a letter informing you about your Recovery Rebate Credit payment.
A Lifeline for Those in Need
The impact of previous rounds of stimulus payments was significant, lifting millions of people out of poverty. In fact, research from 2021 showed that the initial rounds of stimulus checks helped 11.7 million people escape poverty, with 1.3 million Black Americans benefiting. The most vulnerable groups, including children, saw reductions in poverty, with the Black child poverty rate dropping from 23.7% to 16.9%.
This latest round of payments could offer similar relief to those who are still feeling the financial strain of the pandemic and rising consumer prices.
This stimulus round aims to ensure that those who were overlooked the first time around get the support they need to weather the ongoing economic challenges. Keep an eye on your account, and take advantage of this automatic lifeline if you qualify.
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