Some people are lining up for extra money if they didn’t get their fair share of the three stimulus checks authorized so far by Congress. But the IRS cautions that some people may not get what they expect.
The IRS now sends so-called “plus-up” payments to people who did not receive their full payments from all three rounds of federal stimulus checks, each of which has its own eligibility thresholds and payment amounts. The tax agency said it is now sending additional payments as it processes 2020 tax returns, which may indicate that some people are owed more money.
For example, all three rounds of stimulus payments provide money for dependent children, but people who had children in 2020 may not have received all three payments for their children. This is because the IRS has relied on a family’s most recent tax return to determine their payment, and the first two payments were issued before the 2020 tax season began. That means the IRS would have based on 2019 returns for the first two checks. Because those 2019 returns would not have included information about children born in 2020, the agency would not have sent those payments.
However, the 2020 tax filing season is giving people a second chance to claim stimulus money owed to them but not yet received. The IRS says there are two ways that people can do this.
- First, they can claim a correction on their 2020 tax return through the “Recovery Refund Credit,” found on line 30 of Form 1040, for the first two stimulus payments. That extra money will be sent with your tax refund.
- Second, if the IRS has already mailed the third stimulus check, but you are owed more based on your 2020 tax returns, the IRS will automatically adjust your payment after you file your taxes with what is called a “plus-check”. up “. This could happen for higher-income individuals whose income fell in 2020, allowing them to qualify for one or all of the stimulus payments, for example.
Certainly, determining whether and how much you are owed is complicated, and may require active effort from the people who are owed the most money. For one thing, the IRS says that people who don’t normally file tax returns, as in the case of some low-income households, must file a tax return to get their extra money for the first two checks through the Credit Credit. recovery refund.
“You must file a 2020 tax return to claim a recovery refund credit, even if you are not required to file a tax return,” the IRS said earlier this year.
Less than expected? May depend on dependents
The IRS is now warning that some people may get smaller adjustments to the Recovery Refund Credit than they might have expected. If you filled out line 30 of the 1040 form, the IRS will reverify your claim, and if there are problems, you may not get what you expected, the agency said.
If that happens, the IRS said it will send a letter or notice explaining any changes, but also warned that such a failure could lead to a “slight delay in processing the return.”
Two potential pitfalls are tied to dependents and the different payment amounts and eligibility rules that applied to each round of stimulus, according to the IRS. For example, the first round of stimulus checks provided $ 500 per eligible dependent, the second $ 600, and the third provided $ 1,400 per child.
Additionally, the first two checks included an age limit for eligible dependents, excluding adolescent dependents over 17 from payment. The third check provided $ 1,400 for each dependent, regardless of age.
A problem will occur if people claim an additional $ 500 or $ 600 from the first two checks on their tax return, but their child was already 17 years old on January 1, 2020. If that’s the case, the IRS says those Children are not eligible for the first two stimulus checks, and the taxpayer has no luck getting that adjustment.
The second deficit could occur if a child was declared a dependent on someone else’s 2020 tax return. This could happen in the case of divorced or divorced parents, for example. The person who claims the child as a dependent on their tax return should receive the stimulus check. But some divorced parents alternate years when claiming their children as dependents, which can complicate matters. Only the parent who claimed the child on their 2020 taxes should get the Recovery Refund Credit adjustment, according to the tax website 1040.com.
Mathematical conflicts and social security numbers
Other problems can also lead to lower-than-expected payments, such as math errors on your tax return. This can affect your additional or adjusted payment if you misjudged your adjusted gross income because your AGI determines the threshold of your eligibility for stimulus money. (Households with higher incomes were excluded from the three controls).
The IRS also cautions that if you do not provide a valid Social Security number for employment, you will not qualify to receive additional money through the Recovery Refund Credit. This is because the first two checks required at least one taxpayer in a household to have a valid Social Security number to qualify, which excluded some immigrant families.
However, the third check expanded eligibility to allow children with Social Security numbers to qualify, even if their parents only have a Personal Taxpayer Identification Number (ITIN), which is common among undocumented immigrants and other non-citizens who they are not eligible to receive social benefits. Security numbers.