By: Staff
on January 11, 2021

economic stimulus-relief payment-tax services-cpaThanks to legislation signed into law late in 2020, the latest round of Economic Impact Payments (EIP) (also known as “stimulus payments”) started going out on December 29, with an official payment date of January 4, 2021. The IRS plans to send out all payments by the end of January. Here’s what we know about those payments so far.

Who is eligible?

Generally, if you received an EIP in the previous round, you will receive a payment in this round. To be eligible, you must be a U.S. citizen or a U.S. resident alien. You can’t be claimed as a dependent on anyone’s tax return. You must have a Social Security number that makes you eligible for employment in the U.S. Unlike the first round of payments, in couples where the only member had an employment-eligible Social Security number, payments will be made to the member with an employment-eligible Social Security number and any eligible children. In the previous round, these couples and families were not eligible.

Eligibility is based on incomes from 2019 tax returns, or on information submitted using the IRS Non-Filer Tool by November 21, 2020. Individuals who do not file returns but who receive benefits through Social Security, Railroad Retirement, the Veterans Administration, or SSI are also eligible.

How much will I get?

In this round, single filers will get payments of up to $600 and joint filers will receive $1,200. Families with children will receive $600 for each child under the age of 17. The maximum payments will be reduced for incomes between the thresholds listed below. Those with incomes above the relevant thresholds will not receive a payment.

  • Single filers: $75,000 – $87,000
  • Head of household: $112,500 – $124,500
  • Joint filers: $150,000 – $174,000

For example, a couple with two children and a 2019 income of $100,000 will receive $2,400. If that same family had a 2019 income of $180,000, they will not receive a payment.

How will I receive my payment?

If you received your previous payment via direct deposit, your new payment will be paid by direct deposit to the same bank account. Otherwise, you will receive either a paper check or a debit card in the mail. Some people who previously received paper checks will receive debit cards, and some people who previously received debit cards will receive paper checks. The debit cards sent out in the first round will not be recharged.

Do I need to do anything to make sure I receive it?

Eligible people don’t need to do anything. If you filed a 2019 tax return, if you used the IRS Non-Filers tool before November 21, 2020, or if you filed a simplified tax return to receive your previous payment, you will automatically receive a payment if you are eligible. Unfortunately, the IRS Non-Filers tool is no longer in service and cannot be used to request payment in this new round.

What can I do if I don’t receive my EIP?

If you don’t receive your EIP by the end of January and you are eligible for a payment, you will receive it as a Recovery Rebate Credit on your 2020 tax return. This may happen if your 2020 income is different from your 2019 income, or if the IRS does not have your correct banking information. You can check the status of your payment on the IRS online Get My Payment tool.

Where can I go for more information?

The IRS has a set of Frequently Asked Questions covering the new round of payments. You can also find more details on the IRS website.

What about the $2,000 checks?

At this time, the only authorized payments are $600 per eligible person. The IRS has pledged to expedite payments on future legislation. Stay tuned!

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