Bringing Inflation Under Control Is The Goal
Over the course of 2021, many economists and policymakers at the Federal Reserve felt that the higher-than-normal inflation would be temporary. However, as the level of inflation continued to rise to new heights by the end of the year the consensus shifted, and the central bank decided to be more hawkish.
In January the Fed announced that it would begin tapering its stimulus programs which have poured vast amounts of liquidity into the US economy. It has also helped the stock market reach ever greater heights.
Additionally, the central bankers will start increasing interest rates, expected to begin in March, which have been at near zero during the pandemic. The Fed will have a difficult balancing act to pace the fiscal tightening without entrenching inflation by moving too slow or causing a recession if it moves too fast.
Although another stimulus check could help people with the rising cost of living, the fear of driving inflation even higher by injecting even more money into the economy has silenced lawmakers calls to do so.
Will The Irs Tax My Third Stimulus Check
The IRS does not consider stimulus checks to be taxable income. This means that you do not have to report the money on your federal income tax return, or pay income taxes on your stimulus check.
You should also note, that if you owe taxes, you could still qualify to get a stimulus payment because the IRS does not use it to offset federal or state tax debts like it normally does with tax refunds.
For private debts, however, the American Bankers Association has pointed out a loophole in the new stimulus plan where banks and other financial services providers will be legally required to comply with court ordered garnishments. The association says that without legislation to shield your third stimulus payment, creditors or collectors can take it to pay off existing debt.
As a reference, the 2020 COVID-Related Tax Relief Act did shield stimulus payments from private debt collection: The Advance payments are generally not subject to administrative offset for past due federal or state debts. In addition, the payments are protected from bank garnishment or levy by private creditors or debt collectors.
But while your stimulus money could be taken to pay for private debt, the new offsetting rules prevent the IRS from deducting overdue child support from eligible recipients. You should keep in mind, however, that the IRS intercepted or reduced payment from the first round of stimulus checks for past-due child support.
What About People With Itins
You still need a work-authorizing Social Security Number to be eligible for this stimulus. However, there are important changes since the first round of stimulus checks.
- In the first stimulus rollout, any non-SSN holder on a joint return made everyone on that return ineligible. Big change: The new rounds of stimulus has corrected this problem. If you filed a joint return with a non-SSN holder, you are still eligible for the stimulus. See the below hypotheticals.
- Situation: A single tax filer has an Individual Taxpayer Identification Number but no Social Security number .
- This person is ineligible for the stimulus.
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Third Stimulus Checks And Ssi: What It Means For Social Security Recipients
ST. LOUIS The U.S. Treasury has started sending out $1,400 payments as part of the recently passed American Rescue Plan but what does that mean for people on Social Security and when will SSI recipients receive their stimulus check?
According to the IRS, the third round of economic stimulus, known to the Treasury as EIP3, will be sent to people who didnt file a return but receive Social Security retirement, survivor or disability benefits , Railroad Retirement benefits, Supplemental Security Income or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments, often referred to as EIP1 and EIP2.
The IRS has not confirmed the official payment date. Social Security recipients will get the payment the same way they would normally receive Social Security benefits.
For those who received EIP1 or EIP2 but dont receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card . A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments, the IRS says.
While the payment date for many recipients was March 18, a specific date for Social Security recipients has not been confirmed.
The Social Security cost-of-living adjustment is an increase in Social Security benefits to help with inflation.
In January 2022, people receiving Social Security will see an increase by 5.9%.
This marks the largest increase in 40 years.
Stimulus Check: You’ll Need This Irs Notice To Get More Money
If your stimulus check was less than you deserved in 2021, you’ll need IRS Letter 6475 to claim the rest of it.
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The IRS started mailing Letter 6475 in January.
Most Americans received their full Economic Impact Payment — or third stimulus check — in 2021, but it’s possible you could have more money coming. If you had a baby last year or added a qualifying child to your family, you’re eligible for another $1,400. If your income changed significantly in 2021, you could also be owed more money.
The IRS finished mailing the third checks in January, but those entitled to more money can claim what’s called the recovery rebate credit on their 2021 tax returns when they file this tax season. The catch is that you’ll need a specific IRS notice to do that.
Letter 6475, Your Third Economic Impact Payment, was mailed to recipients of the third stimulus check starting in late January. It’s considered the official record of your stimulus payments for all of 2021. The letter helps determine if you’re owed more money via the recovery rebate credit. Even if you don’t qualify for more money, you still need the letter to report stimulus money on your tax return.
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Which Tax Return Is Used For My Third Stimulus Check
The IRS uses 2019 or 2020 tax returns to determine eligibility for your third stimulus check. You should note that if your income fell in the 2020 tax year, filing your tax return earlier could help you qualify for a bigger third stimulus check. The new stimulus plan targets lower income ranges to exclude higher-earning taxpayers from getting a payment.
As we pointed out before, individuals making under $75,000 get the maximum stimulus payment of $1,400 . But payments are capped at $80,000 for single filers and $160,000 for couples. So filing at the beginning of the tax season with a lower income may help you qualify for a bigger check. But, if your income went up in tax year 2020, then you may want to delay filing so that eligibility is determined by your lower 2019 income.
You might also want to file early if the size of your family increased in 2020. The new stimulus plan includes a child tax credit that pays up to $3,600 for each qualifying child under 6 years old, and $3,000 for every child between ages 6 and 17. This means that if you became a parent during the tax year, you could get an additional payment by claiming your child as a dependent earlier.
SmartAssets child tax credit calculator will help you figure out how much you could get for each child.
You can use SmartAssets tax return calculator to figure out your 2021 tax refund or tax bill.
How Can You Check Your Stimulus Check Status
The Get My Payment tool on the IRS.gov website went live on Saturday and can help track your payment and check the status of your money.
The website notes the tool is updated once per day, usually overnight, so theres no need to check multiple times per day.
The Get My Payment tool will tell you:
- Payment date
- Payment method Note: mail means you may be issued an EIP card or a check
If your payment status is not available, that means the IRS has not yet processed your payment, or you are not eligible for a payment.
If you get a message that says Need More Information, that means your payment was returned to the IRS because the post office was unable to deliver it. The IRS said people who got this message will eventually be able to use the tool to provide additional bank account information.
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How Do I Get My Check
These checks will distribute automatically, with no action required for most people. The IRS will use the information in your 2019 tax return to calculate your payment, and use the information in your filing to send or deposit your check. If you havent filed your return for 2019, the IRS will use information from your 2018 tax filing to calculate the payment.
Taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. Visit the IRS Non-Filers website to learn more about how to receive payment.
In the event your direct deposit account information changed, either the IRS will mail you a paper check, or you can update your direct deposit information via the Treasury Department.
You can also track your stimulus payment at
For more information about Stimulus Checks, please visit the IRS website at
I Got A Stimulus Payment For Someone Who Has Died What Should I Do
Someone who has died after Jan. 1, 2021 may be issued a check. If you receive that payment by check and you are the spouse or guardian of the deceased person, you can keep it.
If you cant deposit or cash the check because it was made out to your deceased spouse, you can return it to the IRS. You should include a letter requesting the third payment be made in your name only as the surviving spouse. If you got an EIP card for your deceased spouse and cant access the funds, contact Money Network, the card issuer.
Stimulus payments wont be processed for anyone who died prior to Jan. 1, 2021.
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How Likely Is A Fourth Stimulus Check
Don’t hold your breath, according to Wall Street analysts.
For one, the Biden administration has focused on infrastructure spending to spark economic growth, betting that an investment in roads, trains and other direct investments will help get people back to work and spur the ongoing recovery.
Secondly, economists have pointed fingers at relief efforts such as the three rounds of stimulus checks for contributing to inflation. Because Americans had cash in their pockets, they boosted spending on goods such as furniture, cars and electronics. Combine that with the supply-chain crunch, and the result was sharply higher inflation, according to economists.
Without new stimulus efforts on the horizon, it’s likely that inflation could moderate in 2022, according to Brad McMillan, the chief investment officer at Commonwealth Financial Network. “One cause of inflation has been an explosion of demand driven by federal stimulus,” he noted in a December report. “But that stimulus has now ended.”
He added, “Yes, we will continue to face inflation and supply problems, but they are moderating and will keep doing so.”
When Will I Get The Payment And What Can I Do If I Dont Get It
The IRS is sending the third round of payments out to American families, but we are not sure how long this will take. We believe the IRS will continue to send the third round of payments until December 2021. Because this third round of stimulus is actually an advance payment of a tax credit for tax year 2021, you should be able to claim this credit on your 2021 tax return if you do not get it by the end of 2021.
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What If Dont Normally File A Tax Return
The IRS said this third round of stimulus will be based on tax year 2019 or 2020 information, or information obtained by the Social Security Administration and Veterans Affairs Administration. If you are a non-filer who also does not receive a SSA or VA benefit, then use the Non-filer Sign-up tool, described below.
The IRS recently launched a new Non-filer Sign-up tool on its website. Although this non-filer portal is labeled as for non-filers claiming advance payments of the child tax credit, it is also available for others, including single individuals and people experiencing homelessness. It will allow individuals to provide their information to the IRS so that they can receive any of the three Economic Impact Payments , also known as stimulus payments, that they may be missing. If an individual did not get the full amounts of the EIPs, they may use this tool if they:
- Are not required to file a 2020 tax return, didnt file a 2020 tax return, and dont plan to, and
- Want to claim the 2020 Recovery Rebate Credit and get their third EIP.
The new Non-filer Sign-up tool is for people who did not file a tax return for 2019 or 2020, and who did not use the IRS Non-filers tool last year to register for Economic Impact Payments.
More Third Stimulus Payment Money For Some In 2022
Parents who added a child in 2021 could be getting up to $1,400 after they file their 2021 taxes this coming spring thanks to the American Rescue Plan. The money won’t come as a direct check but will be part of the overall tax return.
The 2021 Economic Impact Payment — colloquially known as the third stimulus check — was actually an advance on what is called the 2021 Recovery Rebate Credit. What that means is that the $1,400 stimulus check most individual Americans received in 2021 is, in fact, money they would have gotten after filing their taxes in the spring of 2022 as a Recovery Rebate Credit.
In other words, millions of Americans already got part of their tax refund 12 months early.
“The bottom line is that’s money that’s going out almost immediately to millions of people as a tax credit in advance of putting it on a tax return in the next year,” said Raphael Tulino, IRS spokesman.
However, the IRS was going off of 2019 or 2020 tax returns for its information on the third EIP. It was using that information to determine if taxpayers would get stimulus money for their dependents. If eligible parents had a child born into their family in 2021, they can request the Recovery Rebate Credit on their taxes to get the payment for that child.
It gets more complicated with adoption because all the paperwork and processes to finalize the adoption must be completed first.
This does not pertain to the first or second stimulus payments that were paid in 2020.
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Dont Wait For A 4th Stimulus Check To Take Control Of Your Money
Getting your hands on some extra cash when youre in a tough spot can feel like a breath of fresh air, but dont depend on a stimulus as your money plan. Weve said it before and well say it again and again dont wait around for the government to take care of you. Its never a good bet.
And truth be told, youll be waiting around for a long time. Sure, a fourth stimulus check can help you out, but it isnt going to be your lifeline. If you really want to take control of your money, you need a proven plan that you are in charge of.
Sooner or later, stimulus checks run out. But knowing how to budget, save, and make your money goals happen is something that keeps on giving. And we know just the thing to get you there. The premium version of our budgeting app EveryDollar, and Financial Peace University are the trusted tools you need to build habits that keep you on track with your money goals. Get your money working for you and start creating the life you wantwithout waiting on the government.
About the author
Ramsey Solutions
Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.
Amount Of Third Stimulus Checks
Question: How much money will I get?
Answer: Everyone wants to know how much money they will get. You probably heard that your third stimulus check will be for $1,400 but it’s not that simple. That’s just the base amount. Your check could actually be much higher or lower.
To calculate the amount of your check, Uncle Sam will start with that $1,400 figure. If you’re married and file a joint tax return, then both you and your spouse will get $1,400 . If you have dependents, you get an additional $1,400 for of them. So, for example, a married couple with two children can get up to $5,600.
Now the bad news. Stimulus payment amounts will be phased-out for people at certain income levels. Your check will be gradually reduced to zero if you’re single with an adjusted gross income above $75,000. If you’re married and file a joint tax return, the amount of your stimulus check will drop if your AGI exceeds $150,000. If you claim the head-of-household filing status on your tax return, your payment will be reduced if your AGI tops $112,500. You won’t get any payment at all if your AGI is above $80,000 , $120,000 , or $160,000 .
Also note that the IRS, which is issuing the payments, will look at either your 2019 or 2020 tax return for your filing status, AGI, and information about your dependents. Because of this, the amount of your third stimulus check could depending on when you file your 2020 tax return.
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