Economic Impact Payments (Stimulus Payments)
To combat the financial devastation wrought by the pandemic, the CARES Act (passed in the Spring of 2020) included stimulus payment paid directly to taxpayers. The payments were up to $1200 for the Taxpayer and Spouse of a household; and $500 for dependent children under the age of 17. Income limitations were set so that stimulus payments were phased out as married taxpayer’s earnings approached $198,000 and single taxpayer’s earnings approached $99,000.
IRS was tasked with two diametrically opposing goals; get the money out FAST and do it accurately. As you can imagine, the original payments were a logistical nightmare and chaos ensued. For instance, if the IRS had not processed a taxpayer’s 2019 returns, it based the payments on 2018 information. What if 2019 information was dramatically different from 2018? How do taxpayers not required to file a tax return get their stimulus (social security recipients)? What if a child was a dependent in the past but would not be a dependent in 2020? What if a taxpayer’s bank account or address had changed since last filing a return? Pure chaos.
After much politicking, Congress finally got around to passing additional relief at the end of the 2020 that included a second round of stimulus. Here are the eligibility requirements for the second round of stimulus:
Generally, you may be eligible for up to $600 ($1,200 for a joint return), plus $600 for each dependent child under the age of 17. The income restrictions are:
- $150,000 if married and filing a joint return;
- $112,500 if filing as head of household; or
- $75,000 for individuals using any other filing status.
You are not eligible for a payment if any of the following apply to you:
- You were claimed as a dependent on another taxpayer’s 2019 tax return.
- You do not have a valid social security number.
- You are a nonresident alien.
- You died before 2020.
In early January, the House passed a bill that would increase the $600 per person stimulus to $1,400 per person. Unlike the previous 2 payments, dependents under the age of 23 are now eligible for the $1,400 stimulus payment. On March 11th, it was signed into law.
Recover Rebate Credit “The True-up”
It is likely that millions of Americans did not receive the correct amount of stimulus payments. To ensure that you received the full amount of stimulus, your 2020 tax return will “true-up” the amounts you received versus what you should have received. It is essential that you provide us with the exact amount of stimulus payments you received from both the first and second rounds. If we prepare a child’s return for you, we must also know of any separate stimulus they received.
Frequently Asked Questions:
I did not receive the correct amount of Round One stimulus payments. What should I do?
The IRS is no longer sending out Round One payments. Any discrepancies between what you received or should have received will be “fixed” by filing your 2020 return.
I have not received a payment for Round Two. Will I get one?
No. The IRS is no longer sending out Round Two payments. Any discrepancies between what you received or should have received will be “fixed” by filing your 2020 return.
How do I check the status of my Third Stimulus payment?
Go to https://www.irs.gov/coronavirus/get-my-payment (GMP) website to check the status of your third payment.
I have not received a payment for Round Three. Will I get one?
Maybe. The IRS has again updated the GMP website for individuals who are receiving the third stimulus payment. If you check the website now, there are a few messages that may appear. (The IRS stopped direct depositing checks on March 24th.)
- If GMP reflects a date your payment was or will be mailed watch the mail carefully for a check or economic impact payment card. The EIP card is a Visa debit card that will come in a white envelope displaying the seal of the US Department of the Treasury.
- If GMP shows “Payment Status – Not Available,” then you the IRS has not determined if you are eligible or you’re not eligible for a payment.
- IF GMP shows “Need More Information,” your return was processed and the IRS doesn’t have account information for you and your payment has not been issued yet. Or, The Postal Service was unable to deliver your payment and it was returned to the IRS. You will need to file the 2020 return to get the payment reissued.
Can I call the IRS to find out the date my payment will be mailed to me?
Unfortunately, the IRS is not accepting phone calls about the scheduling of stimulus payments.
Will my third stimulus check be taxed later?
No. Your third stimulus check is just an advanced payment of the Recovery Rebate tax credit for tax year 2021. It will not be included as taxable income.
What if I have a different bank account now that when I filed my 2019 tax return?
If the third payment was sent to an account that is closed or is no longer active the financial institution must, by law, return the payment to the IRS. They cannot hold and issue the payment to an individual when the account is no longer active. You must file your 2020 tax return to get the payment.
Can I change my address or bank account information on the Get My Payment Webpage?
No. GMP will not allow you to change your address or banking information. If your payment cannot be delivered to you for any reason and is returned to the IRS, you will need to file your 2020 return with the correct address. When the return processes, they will reissue your payment to the corrected address.
Will I receive a letter or notice from the IRS about my payment?
Yes, the IRS will issue a notice, or letter, about the third payment. They will provide an update on the timeline for delivery of the notices when one is available.
Please keep your notice, formally called Notice 1444-B, with your tax records.
What if I received more than I was entitled?
You are not required to give the money back.
What do I do if I receive a payment for a person who has died?
You are required to return it. You need to write void on the check and enclose a short note stating the reason for returning the check. If it was cashed or was a direct deposit, submit a personal check, money order, etc… immediately. Make it payable to the U S Treasury write 2020 EIP and the deceased person’s social security in the memo section and enclose a brief explanation of the reason for returning the EIP.
Where do I mail the check?
If you live in Texas, Florida, Louisiana, Mississippi or Oklahoma, mail it to:
Austin Refund Inquiry Unit
3651 Interregional Hwy 35
Mail Stop 6452
Austin, TX 78741
How often do they update the Get My Payment website?
They update it once a day. There is no need to check it several times a day. You only need to check it one time per day.