If you’ve spent most of January wondering when your $600 federal incentive check will arrive, be warned: There’s no easy answer to when you might get the money.
It may slowly make its way through the US postal system. Or you may have to wait until you file your 2020 tax return, which the IRS won’t process until February 12.
“If it doesn’t show up, claim it on your return,” said Eric Smith, an IRS spokesperson. “We don’t want people waiting to file a dossier if it isn’t there.”
Marc Hoffman, the self-employed owner of Rocky Mountain Bar League, which hosts games like cornhole and bowling in bars, will likely have to claim it as a Rebate Recovery Credit on his 2020 federal tax return.
In April, when he failed to receive the first pandemic stimulus payment, he was able to go to the IRS website and fill out a form to claim it. This time, that option is not available. It appears that a check was never sent because Hoffman doesn’t see any records of it on his IRS account — and even if it was, Hoffman has moved twice since the start of the pandemic.
If he has to pay a refund for 2020, the stimulus will be included in that total. If he owes money to the government, the $600 will be applied to that balance, according to the IRS website and tax professionals.
“Whether it’s $600 in my hand or $600 being written off my potential tax bill, it’s $600 either way,” Hoffman said. “It still feels like I don’t get it to begin with.”
The payments are intended to inject an adrenaline rush into a pandemic-ravaged economy. The first round of stimulus sent payments to 2.7 million Colorado residents starting last April, funneling $4.6 billion into the state’s economy, according to IRS data. In the second round, the impact will be less because the payment amount is halved.
The IRS aimed to send the second round of funds within days of the president’s signing of the economic stimulus package approved by Congress on Dec. 27. But the rapid turnaround was complicated by the IRS’s annual preparations for tax season, when the agency must update its computers and forms to reflect last-minute changes to tax laws.
The first official payment wave went out in the first week of January. Additional payments continue to be rolled out, Smith said.
“In general, we tried to deliver as many payments as quickly as possible,” he said. “We didn’t have much time to work on it.”
Last week, President Joe Biden signed an executive order launching a widespread government effort to get the payments into as many hands as possible as quickly as possible. One of those requirements is that the U.S. Treasury Department establish an online claims system for non-tax-filing Americans, generally the elderly and those on low incomes. The order also required greater reach to those who do not speak English, according to a fact sheet from the Treasury Department.
However, the rollout was awkward. While some people received direct deposit payments in early January, others are waiting due to a slow postal system. Some people who received direct deposits in April are now getting checks sent for no apparent reason. And then there was an IRS error that delayed payments for millions of TurboTax users earlier this month.
“It’s a challenge,” said Henry Grzes, leader of the American Institute of Certified Public Accountants on tax practices and ethics. “I know people really need this and you want to get it to them ASAP.”
When Congress wrote the rules for the most recent stimulus package, the income eligible for the stimulus payment changed. So some people who reported annual income over $75,000 on their 2019 income taxes and got a check in 2020 may not get one in the second round. The AARP estimates that individuals who earned more than $87,000 in 2019, couples who earned more than $174,000, and heads of households who earned more than $124,500 may not receive payments in the second round, according to the website.
Instead of direct deposit or checks, some people receive debit cards and there have been reports of people throwing them in the trash after mistaking them for unsolicited credit cards. Those Visa cards, issued by MetaBank, arrive in a white envelope with a US Department of the Treasury seal, the Treasury’s website says.
Then there’s the issue of what information the IRS has for each taxpayer. If an individual has closed a bank account or moved since filing 2019 returns, the money will likely not come in until it is claimed on a tax form.
Such is the case for Megan Ives, 25.
She received her spring incentive via direct deposit. This time, the IRS says it was sent on January 6, but to an old address. Attempts to determine his whereabouts have failed, despite Ives’ careful study of the IRS “Get My Payment Frequently Asked Questions” webpage.
“The first incentive was a direct deposit into my bank account and I have no idea why this would be a check in the mail,” she said.
The IRS says some banks have rejected direct deposits due to incorrect routing numbers, although Ives said her account has not been changed.
The check could still end up in Ives’ letterbox. But if someone plucked it out of the mail and cashed it in, she could end up in a back-and-forth with the IRS trying to prove she never received the money, Grzes said.
Grzes said he would advise anyone who has not yet received a check or debit card to claim the chargeback discount on their return. This includes people on low incomes and the elderly who typically do not file tax returns.
“This is the only way to claim this credit at the moment,” he said.
Steadily working as a policy analyst at a nonprofit criminal justice reform organization, Ives doesn’t rely on the money to pay bills. She even donated part of her first incentive payment. But she understands the bubbling frustration of those who need the money.
“It’s just such a shame,” Ives said. “I’m sure the people who really need the money right now don’t have the resources and time to easily navigate through this.”