The IRS has finished sending round one and two stimulus checks – if you did not receive yours, you will need to claim it on your 2020 tax return
The IRS has finished sending round one and two stimulus checks – if you did not receive yours, you will need to claim it on your 2020 tax return

The IRS has finished sending round one and two stimulus checks – if you did not receive yours, you will need to claim it on your 2020 tax return

Topline

The Internal Revenue Service announced on Tuesday that it has now issued all “legally permitted” stimulus checks from the first and second rounds of coronavirus emergency legislation – meaning that if you are eligible for these payments and did not receive them (or received less) than you have to pay), you need to claim the extra money on your tax return for 2020.

Key Facts

The IRS and the Treasury Department began issuing the first round of payments approved by the CARES Act in April – $ 1,200 for singles ($ 2,400 for shared files) and $ 500 per person. eligible child.

The second round of payments approved in December was $ 600 for singles ($ 1,200 for married couples applying jointly) and $ 600 per couple. eligible child.

The income limits for both of these payments were the same: up to $ 75,000 per. years for individuals and up to $ 150,000 for couples who applied jointly, with the amount of payments being phased out slowly above the thresholds.

The IRS said Tuesday that while some payments from the second tranche of assistance may still find their way through the mail, it has now issued and issued all payments that it is legally permitted to send.

Americans who do not receive the full payments to which they are entitled (based on their 2020 income) may claim a Recovery discount credit on their tax returns for 2020 (both rounds of stimulus checks have been structured as advance credits for the 2020 tax year).

The IRS also noted that the Get My Payment website, which allows qualified individuals to track the status of their stimulus payments, was last updated in late January.

large number

$ 412 billion. That’s how much money the federal government sent to Americans in the first and second rounds of stimulus control, the IRS said. These payments reached 160 million people in the first round and 147 million people in the second round.

Key background

Despite objections from Republicans, Democrats in the House of Representatives move forward with President Biden’s $ 1.9 trillion US rescue plan. This plan includes a third round of stimulus checks in the amount of $ 1,400 for individuals earning less than $ 75,000 per year and $ 2,800 for joint branches earning less than $ 150,000 per year, plus up to $ 1,400 per year. justified dependent. These payments would be phased out faster than they did in the CARES Act to address legislators’ concerns that too many high-income families received stimulus checks that they did not need or used in 2020.

What to look for

The first two rounds of stimulus checks were issued based on 2019 or 2018 income, depending on when taxpayers filed their 2019 returns. Technically, these checks were a prepayment of a 2020 credit. The third round of checks is likely to be a prepayment of a 2021 credit and will be based on taxpayers’ tax returns for 2020 or 2019, depending on when they submit. Taxpayers whose income increased in 2020 could receive a smaller third payment if they file taxes early before the next stimulus bill is adopted than they would if they waited. Those whose income fell significantly in 2020 compared to 2019 may want to submit an application more quickly – this may mean that they will receive a larger round of three stimulus checks.

Further reading

While Congress is still discussing the stimulus, should you hurry to file your tax return for 2020 or wait? (Forbes)

IRS warns of delays and challenging 2021 tax season: 10 tax tips for filing your 2020 tax return (Forbes)

Here’s where the $ 1,400 stimulus checks, $ 15 minimum wage and the rest of Biden’s $ 1.9 trillion rescue plan stand today (Forbes)

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