The IRS has a message for people still waiting for federal stimulus payments: The money is already at the door.
The tax agency said this week it sent more than 160 million checks – $ 1,200 for adults and $ 500 for children – led by the CARES (Coronavirus Aid, Relief and Economic Security) law, which represented the first round of stimulus payments sent to most American households. As of December, it also sent over 147 million payments for the second round of checks, which offered $ 600 for each eligible adult and child.
True, Congress is negotiating another round of stimulus aid, which could. If the $ 1.9 billion relief effort passes lawmakers, it could be enacted by President Joe Biden by the end of March, Wall Street analysts say. In this case, the IRS would be authorized to distribute a third set of checks. So far, the tax agency has been allowed to send two rounds of checks – and it has said all of those payments have been mailed or deposited into bank accounts.
In total, the IRS has disbursed more than $ 410 billion in so-called Economic Impact Payments, in emergency relief to help tide people out during the, to American households since April. Yet while those checks were delivered to most of the eligible people, the IRS has struggled to reach some of the most financially vulnerable Americans, such as those who don’t have bank accounts or earn enough. money to file tax returns.
These issues have complicated the distribution of the stimulus checks because the IRS relies on a person’s last tax return to determine if they are eligible for payments, as well as to determine where to send the money.
“It was a big deal – those people who qualify but didn’t file a return,” and therefore aren’t on the IRS’s radar, said Jody D’Agostini, a certified financial planner at Equitable Advisors. Some of the people who ran out are the ones who are likely to need the stimulus money the most, she added.
Although the IRS said all checks were issued, it added that some checks may still be mailed. And if you haven’t received one or both of the stimulus payments – or haven’t received the correct amount – you’ll have another chance to claim the money when you file your 2020 tax return, according to the. agency.
“If individuals have not received payment – or if they have not received full amounts – they may be eligible to claim the recovery refund credit and must file a 2020 tax return,” said the tax agency in a press release.
This could happen if a person’s income drops in 2020, like the experience of millions of Americans who were laid off or lost their jobs last year. “Some people didn’t qualify on their 2018 and 2019 tax returns, but then had a horrible 2020 and didn’t get the check, but they were really eligible,” D’Agostini said. These people can claim the payment by completing a 2020 tax return.
The IRS has been criticized by some critics over its distribution of stimulus payments, with national taxpayer lawyer Erin M. Collins calling the agency for failing to ensure checks reach all eligible people. Households who haven’t received their checks “are probably in financial trouble now,” Collins wrote in a report to Congress last month.
In his view, taxpayers shouldn’t have to wait to file their 2020 tax return in early 2021 to receive their payments. Unfortunately for those who missed out, the IRS doesn’t offer another option yet. He said people who missed a payment or didn’t receive the correct amount will have to wait until they file their 2020 tax return to claim the extra money.
How to Claim Your Stimulus Money
The first step is to determine how much of the missing stimulus payments you will need to claim on your 2020 tax returns.
The IRS, which began accepting tax returns Feb. 12, calls the checks “recovery refund credits” on its tax forms. This is because, technically, the payments were actually tax rebates paid before filing your taxes.
To help you determine if you owe more, the IRS has released a recovery refund credit worksheet, which asks questions about eligibility (like your income) and how much you’ve received so far in. the two stimulus checks. If you find that you owe more, you can enter the amount on line 30 on the IRS Form 1040.
If you don’t remember how much you received in the first two rounds of stimulus payments, you can create or view your account on the IRS website. The extra stimulus money will be included in your tax refund. Most taxpayers will receive their refund within 21 days, according to the tax agency.
Congress is now working on a, millions of households could receive a third stimulus check in the next few weeks, which comes in the middle of the tax reporting season.
People who lost their income in 2020 or who had a baby last year may wantto make sure they get the correct amount on their next stimulus check. Otherwise, the IRS could rely on your 2019 tax returns to determine eligibility.
If this happens, people may have another wait ahead of them until they can update their information with the IRS and claim their additional stimulus money.