Over the weekend, the US Senate officially passed a coronavirus relief package based on the framework drafted by President Joe Biden. The House of Representatives has already passed a version of the bill and is expected to vote along party lines soon to pass the updated Senate legislation.
Once the bill is passed in the House, it will soon go to Biden’s desk for his signature. The IRS will then step in to distribute $1,400 direct payments, authorizing the account for eligible Americans. These payments are available for adults, as well as for dependents – including adult dependents omitted on the last invoice.
In most cases, you don’t need to do anything special to get the money. The IRS uses your 2020 tax return information to determine your eligibility and to calculate your check — if you’ve already filed a return. Otherwise it will use your 2019 returns.
However, in some cases it may pay to file a return as soon as possible to ensure that you receive your full payment as quickly as possible.
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Who should file a 2020 tax return as soon as possible to get the incentive money?
There are a few key situations where you need to act quickly to file a 2020 return before the IRS begins sending the next stimulus check. This includes:
If your income has fallen sharply in 2020
The new incentive law contains stricter income limits for eligibility. Americans will receive the full amount of the stimulus payment with income up to $75,000 for single filers and $150,000 for married joint filers.
But while the past two checks gradually expired at a rate of $5 per $100 earned above these thresholds (meaning people could at least get some money, even with much higher incomes), the right to this third payment disappears completely for single filers with $80,000 or more in income or married filers with $160,000.
If your income was above the income limits for 2019, but fell sharply in 2020 — as was the case for many people due to the pandemic — you may want to file a tax return as soon as possible to make sure the IRS has the most recent record when calculating your payment.
If you have new dependents
If you’ve had a child or taken responsibility for an adult since filing your taxes in 2019, it’s also important to file a 2020 return as soon as possible to notify the IRS of your new dependents.
The $1,400 checks are available to dependents also as for independent adult taxpayers. That means adding a child to your family should entitle you to an additional $1,400 in your bank account — as long as the IRS is aware of this life event.
The COVID relief account also provided for an expanded child tax credit worth up to $3,600 for children under six and $3,000 for older children under 17. The relief plan asks the IRS to pay out half of the amount of this credit to the bank accounts between July 2021 and December 2021. You want to make sure the IRS knows about your children as soon as possible to get this money. to get.
What if you do not receive your tax return for 2020 on time?
If your 2020 tax returns aren’t filed before the IRS starts depositing the third stimulus payment into people’s bank accounts, you may be getting the incorrect amount of COVID-19 money — or not getting any money at all.
Ultimately, you should be able to claim this money if you owe it. But you may have to wait a very long time. Unless or until the IRS sets up a form for you to fill out to get the money sooner, you may have to wait until you can file your 2021 taxes. That would be January 2022 at the earliest.
Don’t risk waiting for your money for months. Submit a return as soon as you need to to get the full coronavirus stimulus money that Biden’s emergency plan entitles you to.