Will You Have To Pay Back Money From A Previous Stimulus Check
You might. Heres why: Some people were sent stimulus checks by accident. Whoops! We knowimagine the government making a mistake, right? Heres why you might need to send your money back:
- You make more than the income limit required to receive the stimulus money.
- You were given a check for someone who has died.
- Youre a nonresident alien.
- You dont have a Social Security number.
- Youre claimed as a dependent on someone elses tax return.
If you know one of these applies to you, the IRS expects you to find the error and send the money back to them.12 So go ahead and be honest . You dont want any surprises when you go to file your taxes.
How Stimulus Checks Work
Specific criteria for stimulus checks vary depending on the legislation Congress passes for each specific payment. They can be sent to all taxpayers or only to a subset based on income limits. In some cases, Americans have had to meet other criteria, such as being a government employee, in order to receive a stimulus check.
Whatever the specific critiera, once the legislation is passed, the IRS begins sending checks or direct deposits to stimulus recipients. These payments come out of the U.S. Treasury reserves, and the government counts on increases in spending, hiring, and overall gross domestic product to offset the cost in the future. They are typically not treated as taxable income.
Most recently, in March 2021, the American Rescue Plan Act included cash payments of $1,400 per person for most Americans.
How Should I Spend My Stimulus Check
Millions of people all over the world were affected by this health crisis. It came out of seemingly nowhere and lasted far longer than anyone could have expected. Though things are slowly getting better, we are not completely out of the woods yet.
The economic relief payments received so far have been a help to some struggling families and a bonus to others who managed to get by easier. So what should you do with the stimulus check?
There are various smart things to do with the stimulus checks. Use them to:
- Help buy necessities: It may be smart to also start buying these essentials in bulk. Just be considerate and dont hoard.
- Build an emergency fund: Use the checks to build, rebuild, or increase your emergency fund. As weve seen, you never know what can happen and its best to be prepared.
- Pay off debt: Lower your monthly bills and free up available cash by paying off debt. Using either the snowball or avalanche method is effective.
- Support local businesses: Many businesses have shut down or been on the verge of it due to the public health crisis. If you have the money to spare, it would be generous to support them by shopping locally.
- Invest: Use the money to invest in yourself whether its starting your own business venture or saving towards retirement.
- Donate: Another great option is to donate part or all of your stimulus money to local charitable organizations and food banks.
How many stimulus checks were issued in 2020?How many stimulus checks were in 2021?
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How Much Was Each Stimulus Check
Each stimulus check ranged from $600 to $1,400 per adult and $500 to $1,400 per child.
Stimulus check eligibility: In order to receive the full amount of the payments, your adjusted gross income cannot be more than:
- $150,000 for a joint return,
- $112,500 for head of household
- $75,000 for single and other eligible individuals
Second Round Of Direct Payments: December 2020
The second round of aid, a $900 billion package which was part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed off by Trump on 27 December 2020. It provided a one-off check of up to $600, but this time, households were also able to claim an additional $600 for child dependents aged 16 or under. Those who earned under $75,000 in the 2019 tax year received the full stimulus check, while a steadily smaller figure was given to those on a higher annual income, up to a maximum phase-out limit of $87,000. The first payments, through direct deposit and paper checks with some later payments made by EIP 2 Cards, were issued between 29 December 2020 and 15 January 2021.
Those who didnt receive a stimulus payment either through the CARES Act or the December Covid-19 Relief bill were able to claim for it retroactively when they filed their federal tax returns for 2020 through the IRS Recovery Rebate Credit.
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What If I Dont Have A Bank Account
If you dont have a bank account, a paper check will be sent to the address you listed on your tax return.
Direct deposit is the quickest and safest way to get payments. Alternatives to receiving a paper check are opening a bank account or using a prepaid debit card. Once you get a card, you may need to contact the company directly to find the account and routing numbers needed for direct deposit. To find a bank, you can view this list of accounts offered by financial institutions that meet national standards. You can also use payment apps like CashApp, Venmo, or PayPal.
Do not provide the bank account information for someone else. Different names on the tax return and bank account will trigger a reject of the deposit, causing the IRS to send you a paper check which will delay the delivery of your payment.
Amount Based On 2019 Or 2020 Tax Return
For third-round stimulus payments, eligibility and amounts are based on either your 2019 or 2020 return. If your 2020 tax return isn’t filed and processed by the IRS by the time the tax agency starts processing your third stimulus payment, then the IRS will use information from your 2019 tax return. If your 2020 return is already filed and processed when the IRS is ready to send your payment, then your stimulus check eligibility and amount will be based on the information on your 2020 return. If your 2020 return is filed and/or processed after the IRS sends you a third stimulus check, but before August 16, 2021 , the IRS will send you a supplemental payment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return. As a result, your third stimulus check may be higher or lower depending on when you file your 2020 tax return.
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Who Is Eligible For The Second Economic Impact Payment
Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone elses income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
Avoid Processing Delays When Claiming The 2021 Recovery Rebate Credit
The IRS strongly encourages people to have all the information they need to file an accurate return to avoid processing delays. If the return includes errors or is incomplete, it may require further review while the IRS corrects the error, which may slow the tax refund.
To claim the 2021 Recovery Rebate Credit, individuals will need to know the total amount of their third-round Economic Impact Payment, including any Plus-Up Payments, they received. People can view the total amount of their third-round Economic Impact Payments through their individual Online Account. The IRS will also send Letter 6475 through March to those who were issued third-round payments confirming the total amount for tax year 2021. For married individuals filing a joint return with their spouse, each spouse will need to log into their own Online Account or review their own letter for their portion of their couple’s total payment.
The IRS urges recipients of stimulus payments to carefully review their tax return before filing. Having this payment information available while preparing the tax return will help individuals determine if they are eligible to claim the 2021 Recovery Rebate Credit for missing third-round stimulus payments. If eligible for the credit, they must file a 2021 tax return. Using the total amount of the third payments from the individual’s online account or Letter 6475 when filing a tax return can reduce errors and avoid delays in processing while the IRS corrects the tax return.
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A Timeline Of Past Stimulus Checks
The pandemic stimulus payments started nearly two years ago.
Stimulus checks were first deposited in the spring of 2020 when the COVID-19 pandemic was just beginning, driving up the unemployment rate and causing financial hardship for many. Individuals with income below $75,000 received $1,200 and couples earning below $150,000 received $2,400.
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The Trump administration then in December 2020 $600 per individual taxpayer, $1,200 per married couple and an additional $600 for each child under the age of 17.
A third round came under the Biden administration in March 2021, giving $1,400 per individual and $2,800 per married couple, along with $1,400 per dependent this time regardless of age.
Surprising Facts About Stimulus Checks In 2021
The American Rescue Plan Act of 2021 added section 6428B to the Internal Revenue Code. It authorized payments up to $1,400 to qualifying individuals $2,800 for people filing jointly plus another $1,400 for each qualifying child as part of President Joe Bidens $1.9 trillion coronavirus stimulus package.
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It was the third major pandemic recovery bill of its kind.
Those payments came during turbulent times as the vaccine battles were heating up and inflation was starting to rise. A lot of information about the payments got lost in the shuffle, and the impact is still being felt today.
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Ways To Find The Amount Of Your First And Your Second Stimulus Checks
Hint: If you lost the letter on your payment the IRS sent you, you have options. We’ll tell you what you need to know.
How much stimulus money did I get again?
The first and second stimulus payments still haven’t arrived for some folks. If this is the case for you, you can claim a Recovery Rebate Credit when you file your 2020 tax return — oh, and don’t worry, the IRS extended the filing deadline. Taxes are now due on May 17, so you — and the IRS — have a bit more time.
If you want to check the amount of your first and second payments — for a jog to your memory, your records or for taxes — you can no longer view it in the Get My Payment tool. But we can help. Here are two ways to find out the amounts of your first two stimulus checks.
How Many Stimulus Checks Did Americans Receive
- Jennifer Roback
- 16:56 ET, May 13 2021
- Jennifer Roback
- Invalid Date,
MANY AMERICANS suffered financially during the Covid-19 pandemic.
In order to help Americans during the financial difficulties resulting from the pandemic, the government sent out stimulus checks.
Read our stimulus checks live blog for the latest updates on Covid-19 relief…
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Who Qualifies For The Third Stimulus Payments
Generally, if youre a U.S. citizen and not a dependent of another taxpayer, you qualify for the full third stimulus payment. In addition, your adjusted gross income cant exceed:
- $150,000 for married filing jointly
- $112,500 for heads of household
- $75,000 for single filers
A partial payment may be available if your income exceeds the thresholds. However, you will not receive any payment if your AGI is at least:
- $160,000 for married filing jointly
- $120,000 for heads of household
- $80,000 for single filers
The full amount of the third stimulus payment is $1,400 per person and an additional $1,400 for each qualifying dependent.
Do I Need To File My Taxes To Get A Stimulus Payment
If you are required to file a tax return, the IRS will use information from your most recent filed tax return to issue your stimulus payment.
Here are the reasons you are required to file a tax return for tax year 2020:
- Taxpayers who earn income more than the IRS income filing threshold .
*Note: If you are single and 65+, thresholds are bumped up to $14,050 for 65+ or blind. If you are married filing jointly, 65+ thresholds are $13,700 for 65+ or blind.
- Self-Employed whose net income is $400 or more since they need to pay self-employment taxes on income of $400 or more
- Dependents with unearned income more than $1,100 and earned income more than $12,400
- You received an advance payment of the health coverage tax credit
- You owe taxes on an IRA or Health Savings Account
If are not required to file, you can use the TurboTax free Stimulus Registration Product to provide the IRS information needed so that you can receive a stimulus payment.
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What Is A Coronavirus Stimulus Check
The first round of checks were part of the $2.2trillion economic relief package passed by Congress in March 2020.
The package was an initial response to the economic impact of COVID-19.
In March 2021, President Joe Biden then signed the $1.9trillion American Rescue Act into law.
The latest round of cash begins to be phased out for individual tax payers who earn $75,000 a year.
But once you hit the $80,000 annual gross income limit, you wont be eligible for the help at all.
Like the single-taxpayer cut off, theres a $120,000 AGI cap on how much heads of households can earn to be eligible for the help.
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As with previous payments they would still need to meet the income eligibility requirements.
To get the check, single filers would need to make no more than $75,000 per year in adjusted gross income while couples filing jointly would need to stay below $150,000.
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Parents earning above that threshold would see their checks reduced or completely phased out if theyre a single-filer earning above $80,000 or a couple filing jointly earning above $160,000.
The number of families still owed a $1,400 stimulus check is not yet known but it is estimated to be in the millions.
The figure wont be known until the total number of births for 2021 is revealed.
In 2020, there were 3.61million births in the US down from 3.75m in 2019.
If there was baby boom in 2021 this wont be apparent until the figure for births is in.
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What Else Is Included In Bidens Stimulus Package
Like we talked about before, the presidents American Rescue Plan is full of big changes. It includes some of the proposals Biden campaigned on. Heres a quick rundown:
- Increase the Child Tax Credit from $2,000 for dependents under the age of 17 to $3,000 for children ages 617 and $3,600 for children under age 6.
- Increase the Child and Dependent Care Tax Credit from a max of 35% of qualifying childcare expenses to a max of 50% of qualifying expenses .
- Keep weekly unemployment benefit payments under the Federal Pandemic Unemployment Compensation program at $300 and extend benefits under the Pandemic Emergency Unemployment Compensation program through September.
- Extend the payment relief for federally guaranteed mortgages as well as the suspension on evictions and foreclosures until September.
- Provide financial support for renters and landlords.14, 15
And theres more: Bidens plan also includes grants and loans for small businesses, aid to state and local governments, money for COVID-19 vaccine distribution and testing, money to reopen schools, support for colleges and childcare providers, and more paid sick time for folks who have COVID-19, are quarantining because of it, or are caring for family members who are sick.16
Stimulus Update: Fourth Stimulus Check
11 Minute Read | September 24, 2021
By now, youve heard the history of how a third stimulus happened: Just as most Americans received their $600 second stimulus check from the U.S. Treasury in early January, then president-elect Joe Biden unveiled his $1.9 trillion American Rescue Plan that includedyou guessed itthe third stimulus payment.
But there have been a few new twists and turns since March 2021 when all the details of legislation were worked out, passed, and signed into law. The latest stimulus update is thissome states in America are giving out a fourth stimulus check. Curious? Yep, we are too. Lets dive in.
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How Will You Receive The Third Stimulus Check
Most people have gotten their previous stimulus checks by direct deposit with the bank account on file with the IRS. Payments were automatic for anyone who filed a 2019 tax return and/or receives Social Security benefits. If you dont have direct deposit with the IRS, your payment would take a little more time and come as a check or debit card in the mail.11