U.S. Second Round of Economic Impact Payments
The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, late December 2020. This article will give you a summary of the second round of economic impact payments.
How Can I Receive the Second Payments?
According to the IRS, there is no action required by eligible individuals to receive this second payment. The payments are automatically sent to the eligible individuals.
Am I Eligible for the Second Payments?
Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s 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. Most people who have an adjusted gross income for 2019 of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
When Can I Receive the Second Payments?
The direct deposit payments may take several days to post to individual accounts. Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of January 4, 2021, which is the official date funds are available.
Mailed payments will require more processing and mailing time. Those who reside abroad will have longer wait times for checks as disruptions to air travel and mail delivery in some countries will slow delivery.
People can check the status of both their first and second payments by using the IRS website.
What Should I Do If I Do Not Receive the Payment or It Is Less Than Expected?
Payments started going out in late December 2020 and will continue through mid-January 2021. Direct deposit payments are being made first to those that have valid routing and account information on file for direct deposit purposes. Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active. By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active. While the IRS is exploring options to correct these payments, if you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return.
The credit is figured like the Economic Impact Payment, except that the credit eligibility and the credit amount are based on the 2020 tax year information, including income.
For people who received a partial Economic Impact Payment, they can take the Recovery Rebate Credit for any remaining amount they are eligible for by completing line 30 of the 2020 Form 1040 or 1040-SR.