The latest COVID-19 relief bill introduced another round of stimulus checks. However, this time with different restrictions. The IRS has already started sending stimulus money into the bank accounts of the recipients. Alloy Silverstein answers some questions you might have about the latest Economic Impact Payments.
Much like the first two stimulus checks, there is nothing you need to do. As long as you have filed your 2019 or 2020 tax returns, the IRS will determine if you are eligible for the economic impact payment. If you have yet to file your 2020 tax return, the IRS will use the information from your 2019 return.
If you haven’t received your stimulus check and you believe you are eligible, you can check the status on the IRS website. Go to https://www.irs.gov/coronavirus/get-my-payment. Once you input your information into the “Get My Payment” tool, there are different status messages you might see. It may tell you a payment has been processed, the date it is available, and whether it is being sent direct deposit or mail (you will receive an EIP card or check). Another status that may show up is that you are eligible, but the payment has not been processed yet and there is no date available. The tool may also disclose that payment status is not available which means it has not yet been processed or you are not eligible. Lastly, it may inform you that the IRS needs more information and was unable to deliver your economic impact payment. The system will then prompt you to provide your bank account information.
Our article concerning the American Rescue Plan Act provides information about who will receive the stimulus check. Taxpayers who qualify will also receive a stimulus payment for their dependents. Unlike the first 2 stimulus checks, adult dependents (those over 17) are now eligible. There is no minimum income needed to qualify, so you do not need to be employed in order to be eligible.
Use the following chart to determine eligibility based on adjusted gross income (AGI).
| Eligibility | Individual | Head of Household | Married Filing Jointly |
|---|---|---|---|
| Qualifies for full amount | Less than $75,000 | Less than $112,500 | Less than $150,000 |
| Qualifies for reduced amount | $75,000-$80,000 | $112,500-$120,000 | $150,000-$160,000 |
| Does not qualify | Higher than $80,000 | Higher than $120,000 | Higher than $160,000 |
If you have not filed your 2020 tax return or the IRS has yet to process it, the IRS will use your 2019 return and will not be aware you should receive an additional stimulus check for the child born in 2020. Don’t worry! When you file your 2021 taxes, the IRS will amend the stimulus money you should have received.
Does your deposit not match what you expected to receive? While this is incredibly frustrating, the IRS is extremely backlogged with unopened mail and tax season chaos. It is no use trying to contact them. Instead, work with your CPA and you can claim a rebate when your file your 2021 tax return.
Many individuals filed their 2020 tax return and realize they should receive money or incorrectly paid following the passing of the recent COVID-19 relief bill. The IRS urges those to not try to amend the return. This may result in confusing the system. Manager, Chris Cicalese, CPA, MSTFP, dives into this topic on a recent interview with New Jersey 101.5. Read the article here.
The IRS may be slower than normal as they process stimulus payments and tax returns. However, you can check the status of your federal and state return. Click here to visit our tax season page to check the status of your tax refund from the IRS, New Jersey, or Pennsylvania.
IRS2Go is the IRS’s secure mobile app with the capability to check your refund status from your smartphone or tablet.
How fast or slow individuals are receiving their stimulus checks depends on the bank and financial institution they are currently using. The bank you use will affect the timing of processing these payments. Also, people who choose direct deposit will receive the economic impact payment faster than those who prefer mail.
The IRS is sending prepaid EIP debit cards to those who do not use direct deposit for payments with the IRS. You will receive a letter in the mail. Be on the lookout for this as you may easily confuse it for junk mail! Make sure NOT to throw it away.
If you did not receive the prior stimulus checks, be sure to double check eligibility. Per the CARES Act:
| Begins to Phase Out | Completely Phases Out | |
|---|---|---|
| Individual | $75,000 | $99,000 |
| Married Couple | $150,000 | $198,000 |
| Head of Household | $112,500 | $136,500 |
If you were eligible and still did not receive the money, you will be able to claim the recovery rebate credit on your 2020 tax return, even if you do not normally file. This will not affect the status of the most recent stimulus payment.
In addition, if you did not qualify for the first two Economic Impact payments that were based on 2018 and 2019 returns, it can be a possibility that you are eligible for this third round based on your 2020 tax return.
No, all three of the Economic Impact Payments are not taxable income. Like the last two payments, expect to receive a notice from the IRS in the mail that confirms the exact payment distributed to you. You will want to save that for when you need to prepare your 2021 tax return next year.
The following article has much more specifics on questions being asked about the Economic Impact Payments, especially for uncommon situations. You can also refer to the IRS Economic Impact Payment Information Center for additional FAQs and guidance. As always, you can also turn to your CPA and tax advisor.
Looking for more information about the latest round of stimulus checks and third COVID-19 relief bill? Sign up for our webinar on March 22nd at 1pm. Click here to register. If you have additional questions, please contact us at solutions@alloysilverstein.com and we will be happy to get back to you directly.
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