If you have not already, you might receive your Economic Impact payments in the coming days.
On December 29, the Internal Revenue Service (IRS) and the Treasury Department began distributing payments to Americans who received the first round of EIP earlier this year. Paper checks are also being mailed since yesterday, December 30
As per IRS instructions, no action is required by eligible individuals to get the second payment, thus they should not contact the IRS or their financial institutions with payment timing questions. Eligible taxpayers include those who filed a 2019 tax return; those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and those Veterans Affairs beneficiaries who were not able to file a tax return. Payments are also automatic for those who have successfully registered at IRS.gov for the first time payment via the agency’s Non-Filers tool by November 21, 2020 or those who submitted a simplified tax return processed by the IRS.
The IRS informs that anyone who received the first round of payments earlier this year but doesn’t receive direct deposit payments will get either a check or a debit card. For those that fall in this group, the payments will conclude in January.
Taxpayers who did not receive a payment this year are urged to review their eligibility criteria when filing their 2020 taxes to claim it as a credit. You will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC. The EIP amount that you are entitled to is determined by your 2020 income. Accordingly, for individuals who experienced a fall in income between 2019 and 2020, the EIP amount they receive may be less than what they are entitled to base on their 2020 income. Taxpayers can claim a credit on their 2020 federal income tax return for the difference between (a) the amount they are entitled to under law and (b) the amount they received as an advanced payment.
Important questions answered by the IRS:
Who is eligible for the second EIP?
Individuals who are eligible for the second payment are U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return. They will receive up to $600 for individuals or $1,200 for married couples and a maximum $600 for each qualifying child. In general, you will receive the full amount if you are: (1) Individuals with adjusted gross income up to $75,000 in 2019 or (2) Married couple filing joint returns and surviving spouses up to $150,000. A reduced amount will be received by filers who exceed these income limits.
How to check your payment status?
You can check the status of both the first and second payments via the Get My Payment tool, on IRS.gov. It is currently being updated with new information and will be available for taxpayers in a few days.
How will the IRS know where to send my payment?
The IRS will use the existing data in their systems to send the new payments. Individuals with stored direct deposit information will receive the payment in that manner. For those without current direct deposit information, they will receive the payment either as a check or debit card via mail. If for any reason, eligible individuals don’t receive a payment, they may claim it by filing a 2020 tax return in 2021.
For more information about the Economic Impact Payment or latest tax updates, check out our previous articles or sign up to our newsletter.
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