You Filed A Paper Return
The IRS warned earlier this year that people who file paper tax returns could face delays. That’s because the IRS is still dealing with a logjam of tax returns filed in 2019 and it’s likely that 2020 returns filed on paper will also face processing delays.
The tax agency’s backlog is partially due to the pandemic, which prompted the IRS to shift its workers to remote work. When that happened, it stored paper tax returns in trailers until it could get to them. At the end of January, it still had 6.7 million returns awaiting processing.
People should file an electronic return in 2020 to ensure faster processing of their taxes, as well as their refunds and stimulus payments, IRS and Treasury officials said March 12.
Do I Have To File 2020 Taxes To Get The Third Stimulus Check
No. The Treasury can use 2019 or 2020 tax returns to determine your payment.
It will also send payments to people who don’t file taxes, but who either used the IRS nonfilers tool last year to submit information or receive federal benefits such as Social Security retirement or disability and Supplemental Security Income.
However, if you qualify for more money based on your 2020 income or need to claim additional dependents, you will need to file a 2020 tax return so the IRS can top off your payment.
What If The Irs Has The Wrong Bank Account
Unfortunately, the IRS says you can’t change the bank account it has on file for you unless you get the “Need More Information” message. The IRS is initially relying on bank account information that people gave it through a variety of ways: their 2020 tax return, their 2019 tax return if their 2020 return isn’t yet filed, information you gave the IRS on the “Get My Payment” site last year or information you entered through the “Non-filer” portal last year.
It will also tap federal agencies such as the Social Security Administration or Veteran Affairs to get bank account information for people who receive benefits through those agencies.
So what happens if your bank account changed since you provided that information to the IRS? The bad news is you may have a delay in getting your funds but you will eventually get them, the IRS insists. The agency said payments that are sent to accounts that have been closed will be returned to the tax agency. At that point, the IRS will send a payment through paper check or pre-paid debit card to your mailing address.
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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 there’s 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.
Fourth Stimulus Check: Are More Payments Coming
A fourth stimulus check from the government could take one of two forms: monthly checks in fairly small amounts, or one-time payments of up to $2,000.
Both options have been put forward by legislators in Congress as follow-ups to the third round of pandemic relief payments, which were made possible by the American Rescue Plan Act of March 2021.
The U.S. economy is still recovering, with slow but steady job growth even as unemployment numbers hold steady and the Delta variant of COVID-19 causes hospitalization rates to soar.
The federal moratorium on evictions ended Aug. 26 with a Supreme Court ruling, and millions now face losing their homes. Inflation, however, appears to be on the rise, contributing to fears among economists and lawmakers that further stimulus payments could only fuel more price hikes.
As a result, there’s no legislation in Congress that’s likely to pass that would create a fourth round of stimulus payments, even though some Democratic lawmakers have called on President Joe Biden to consider recurring payments.
The White House has passed back the buck, stating that the president would consider whatever Congress comes up with.
At the end of July, Rep. Ilhan Omar , introduced a bill that would send $1,200 to each American making less than $75,000 per year, forever. But it has not moved forward in the House of Representatives and has little chance of passing.
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Older Adults And Third Stimulus Checks: Eligibility Rules And What They Mean For You
The IRS is in the middle of sending the next wave of third stimulus payments to those who are eligible for the payment. And if you’re age 65 or older, you receive Social Security benefits or you’re a veteran, you will likely receive a $1,400 check . It may be different, however, for individuals with “high” income levels from investments or other sources.
The total amount of this third check also depends on how many dependents you’re claiming this year , or if you’re claimed as a dependent on someone else’s taxes. Tax season may also be a deciding factor this time if you filed a tax return in early 2021 and it’s already been processed by the IRS.
We’ll explain everything that could affect your third stimulus payment — from filing your federal taxes this year to your adjusted gross income, pension and Social Security benefits, as well as if someone counts you as an adult dependent on their taxes. Also, if you’re still missing money from the first or second checks, you’ll need to claim it as a Recovery Rebate Credit on your 2020 taxes, even if you don’t usually file them. This story has been updated recently.
Many seniors automatically received a first stimulus payment, but eligibility may change if a second is passed.
Can My Recovery Rebate Credit Be Garnished
The first and second rounds of stimulus checks authorized in March 2020 and December 2020 were protected from federal and state debt offsets, and even private debt collectors in some cases.
Unfortunately, the same protections don’t apply when these payments are claimed as the Recovery Rebate Credit on your 2020 return. Remember, you can only claim the credit if you’re missing a stimulus check you qualify for, or you received too little based on your 2020 income and tax situation.
Your stimulus tax credit can be used to offset state or federal debts, like past-due child support . Your credit cannot be used to offset federal taxes you owe for prior years, according to guidance .
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Still Living Paycheck To Paycheck
Some top economists have called for more direct aid to Americans. More than 150 economists, including former Obama administration economist Jason Furman, signed a letter last year that argued for “recurring direct stimulus payments, lasting until the economy recovers.”
Although the economy is improving, millions of people continue to suffer from reduced income and have not been able to tap government aid programs, Nasif said. Only 4 in 10 jobless workers actually received unemployment aid, according to a from economist Eliza Forsythe.
Many people never applied for unemployment benefits because they didn’t think they were eligible, while others may have given up due to long waits and other issues.
“You’ll see reports about how the economy is starting to grow, but there are a lot of Americans living paycheck to paycheck, and for a lot of them the government relief programs haven’t been able to help,” said Greg Nasif, political director of Humanity Forward.
Taxation Of Third Stimulus Checks
Question: Will my third stimulus check be taxed later?
Answer: No. As with the first two rounds of payments, your third stimulus check is actually just an advanced payment of the Recovery Rebate tax credit for the 2021 tax year. As such, it won’t be included in your taxable income.
You also won’t be required to repay any stimulus check payment when filing your 2021 tax return even if your third stimulus check is greater than your 2021 credit. If your third stimulus check is less than your 2021 credit, you’ll get the difference when you file your 2021 return next year. So, it’s a win-win situation for you!
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How Much Money Will I Get From The Third Stimulus Check
Most households that received an earlier stimulus check will get one again, but the amounts are different this time. The baseline:
- $1,400 to each adult
- $1,400 to each dependent meaning, anyone claimed on a tax return, including older adults, disabled adults, and child dependents of any age
- For example, a family of four could potentially receive $5,600
The dependent eligibility is different from the second stimulus check, but there are a lot of caveats to be aware of. Its important to read through the information on the IRS website or this CNN article. A few important highlights:
- Dependents dont receive their own stimulus checks funds are sent to the household
- If you share custody of a dependent, both you and the other parent could get stimulus checks, depending on how you file your taxes
- You are still eligible to receive a stimulus check if you owe child support
- If you have more or fewer dependents since the last time you filed taxes for instance, a new child was born into your family you should update your number of dependents by filing your 2020 tax return
Payments will be sent out in a few weeks via direct deposit, as physical checks, or via Economic Impact Payment debit cards.
Tip: Signing up for direct deposit with the IRS could help you get your refund even faster than waiting for a check or Economic Impact Payment debit card to arrive in the mail.
You Haven’t Filed Your 2019 Or 2020 Tax Returns
Many people probably haven’t filed their 2020 tax returns yet, given that the deadline for getting in your tax forms is April 15. In that case, there’s no reason to worry the IRS will use your 2019 tax return to determine how much you should receive.
But this becomes trickier for people who aren’t required to file tax returns, such as those with no or very little earnings, which can be the case for some people on Social Security.
That became an issue with the first round of stimulus checks, especially since many of these people were in deepest need of the first round’s $1,200 payments and it wasn’t an insignificant number. The IRS said it distributed more than 22 million stimulus payments last year that weren’t based on filed tax returns.
Because of that issue, the IRS last year created a website specifically for non-filers, where they could provide their bank account information or addresses to the agency, as well as provide their number of dependents, who were each eligible for $500 in stimulus aid at the time.
But the non-filers website has been closed since late last year, and IRS and Treasury officials said on a March 12 conference call with reporters that they are urging non-filers to file a 2020 tax return to ensure they get all the payments and tax credits they are owed.
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Focus On What Goes On At Your Housenot The White House
Its hard not to worry as you watch billions and trillions of dollars fly out the window in Washington, D.C. And while those things matter, the truth is, you have ultimate control over your money and what choices are made in your house. You have the power to improve your money situation right nowtodaywithout having to rely on the government.
For all the motivation you need, check out the premium version of our budgeting app EveryDollar, and Financial Peace University . These are the tools that will show you exactly how to pay off debt, increase your savings, and build wealth for a secure future. Its worked for millions of people, and you can try them today for free! Take control of your future and get the hope you needstimulus or not.
About the author
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.
Things To Know About The Third Round Of Stimulus Payments
> > > To find out the status of your third stimulus , use the IRS’ Get My Payment tool .
On March 11th, President Biden signed the American Rescue Plan into law, which will provide essential financial relief to individuals and families along with COVID-19 relief to states and localities. One component of the package is a third round of stimulus payments. Despite wide news coverage about these payments, many have questions about whos eligible and how to receive the payments. These payments also have different eligibility rules than those distributed earlier. Below are ten things to know about the third round of payments:
1. The payments will be $1,400 per qualifying adult and $1,400 per dependent. For the third round of stimulus payments, taxpayers can get payments for dependents of all ages, including children over the age of 17, college students, and adults with disabilities. The taxpayer will receive the payment on behalf of the dependent, although financially independent college students and young adults who are not claimed as a dependent may be eligible for their own payment. The payments are an advance against a new credit for tax year 2021. These payments will not affect eligibility for other tax credits.
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What Should You Do With Your Third Stimulus Check
Lets be real: Three stimulus checks in a year is not normal. This third payment can go a long way to help you catch up on bills, pay off debt, or build up your savings. And for a lot of folks, those stimulus checks have kept food on the table. In our State of Personal Finance study, we found that 41% of people who got a stimulus check used it to pay for necessities like food and bills.
So, based on your situation, heres where you start:
If youre out of work or missing a paycheck, use this stimulus money to protect your Four Walls:
Focus on the necessities so you can have peace of mind as you keep looking for work or get your income back up. That means if youre working the Baby Steps and youre out of work, pause your plan for now. Pile up cash until you have a steady income again. Then you can attack your debt. Theres nothing like fighting through a financial crisis to light your fire to be debt-free as soon as possible!
On the other hand, if your job is safe and you feel like itll stay that way, use your stimulus money to build momentum on whatever Baby Step youre on. Put your debt snowball into overdrive. Knock out your fully funded emergency fund . Or talk to your investment professional about giving your retirement a big boost !
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.
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Social Security Stimulus Checks Status
The IRS said a large set of payments for those on Social Security retirement, survivor or disability, Supplemental Security Income, and Railroad Retirement Board will start going out Friday. For those who are receiving the payments electronically, they should show up in accounts on April 7. The Get My Payment tool should be updated this weekend to track these payments, according to the IRS.
The agency still does not have a specific date for when Veterans Affairs beneficiaries will get their stimulus payments, but is targeting mid-April. Those on VA benefits still cannot check the Get My Payment tool.
In Other News
Fourth Stimulus Check Possible Timeline
Right now, there is no fourth stimulus check timeline or fourth stimulus check release date. Until legislation is in motion, we can’t say how soon more relief money might arrive. We can’t say whether more relief money is coming, at all.
That said, the third stimulus check timeline happened rather quickly following Biden’s inauguration Jan. 20. It only took a few weeks for Congress to debate his American Rescue Plan. Once the president signed the bill on March 11, $1,400 checks were put in motion.
The IRS can begin sending out possible fourth stimulus checks in the same manner it sent the previous stimulus payments. Since the framework is already in place, Americans could begin receiving the fourth stimulus checks about two weeks after a relief bill allowing another round of direct payments is approved.
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