The IRS has a message for people still waiting for federal stimulus payments: the money is already out the door.
The tax agency said this week that it has sent more than 160 million checks – $ 1,200 for adults and $ 500 for children – directed by the Coronavirus Relief, Relief and Economic Security Act (CARES), which represented the first round of payments. of stimulus sent to most American households. As of December, it also sent out more than 147 million payments for the second round of checks, offering $ 600 for each eligible adult and child.
Clearly, Congress is currently negotiating another round of stimulus aid, which could lead. If lawmakers pass that $ 1.9 billion aid effort, President Joe Biden could sign it into law by the end of March, Wall Street analysts say. In that case, the IRS would be authorized to distribute a third round of checks. So far, the tax agency has been authorized to send two rounds of checks, saying that all of those payments were sent by mail or deposited into bank accounts.
In total, the IRS has disbursed more than $ 410 billion in so-called Economic Impact Payments, emergency aid to help people recover during the, to American homes since April. However, while those checks have been issued to most eligible individuals, the IRS has struggled to reach some of the most financially vulnerable Americans, such as those who lack bank accounts or do not earn enough money to file tax returns. .
Those problems have complicated the distribution of stimulus checks because the IRS relies on an individual’s most recent tax return to determine if they are eligible for payments, as well as to determine where to send the money.
“That was a big problem – people who qualify but didn’t file,” so they’re not on the IRS’s radar, said Jody D’Agostini, a certified financial planner with Equitable Advisors. Some of the people who were lost are likely to need the stimulus money the most, he added.
While the IRS said all checks have been issued, it added that some checks may still be in the mail. And if you haven’t received one or both of the stimulus payments, or you didn’t receive the correct amount, you will have another chance to claim the money when you file your 2020 tax return, according to the agency.
“If individuals did not receive a payment, or if they did not receive the full amounts, they may be eligible to claim the recovery refund credit and must file a 2020 tax return,” the tax agency said in a statement.
That could happen if someone’s income fell in 2020, as experienced by the millions of Americans who were laid off or lost their jobs last year. “Some people didn’t qualify through their 2018 and 2019 tax returns, but then they had a horrible 2020 and they didn’t get the check, but they were really eligible,” D’Agostini said. Those individuals can claim payment by filing a 2020 tax return.
The IRS has been criticized by some critics for its distribution of the stimulus payments, and national taxpayer advocate, Erin M. Collins, criticized the agency for failing to ensure that the checks went to all eligible individuals. Households that did not receive their checks “are probably experiencing financial problems now,” Collins wrote in a report to Congress last month.
In his view, taxpayers shouldn’t have to wait to file their 2020 tax returns in early 2021 to receive their payments. Unfortunately for those who got lost, the IRS offers no other option for now. He said people who did not make a payment or did not receive the correct amount will have to wait until they file their 2020 tax returns to claim the extra money.
How to claim your stimulus money
The first step is to find out how much money is missing from the stimulus payments that you will need to claim on your 2020 tax returns.
The IRS, which began accepting tax returns on February 12, calls the checks “recovery refund credits” on its tax forms. That’s because technically the payments were actually tax refunds paid before filing your taxes.
To help determine if you are owed more, the IRS published a Recovery Refund Credit worksheet, which asks questions about eligibility (like your income) and how much you’ve received in the two stimulus checks thus far. If you discover that you are owed more, you can enter the amount on line 30 of 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 additional stimulus money will be included with your tax refund. Most taxpayers will receive their refund within 21 days, according to the tax agency.
With Congress now working on aMillions of households could receive a third stimulus check in the coming weeks, which comes in the middle of tax filing season.
People who lost income in 2020 or had a baby last year may wantto make sure they get the correct amount on their next stimulus check. Otherwise, the IRS may rely on your 2019 tax returns to determine eligibility.
If that happens, people may have another wait ahead of them until they can update their information with the IRS and claim their additional stimulus money.