The Treasury Department and the Internal Revenue Service (IRS) have started to deliver the second round of coronavirus stimulus checks, known as Economic Impact Payments, to millions of Americans. The stimulus payments are a part of the Relief Supplemental Appropriations Act of 2021 as well as the Coronavirus Response. The first round of the stimulus was delivered around summer 2020.
“The American Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on 27th March 2020. It is over USD 2 trillion relief package to safeguard American citizens against economic as well as the public health impacts of COVID-19. The Act offers fast and direct economic support for American families, workers, and small businesses, and preserve jobs for the American industries. ”
This has been a challenging year for all of us. The IRS has worked all day and all night for providing critical taxpayer services like delivering the Economic Impact Payments to the American citizens.
The direct deposit payments began from the night of 29th December while the paper checks were mailed starting from December 30, 2020. The eligible citizens require no additional actions to receive the second stimulus payments, emphasized the IRS. It also reminded the taxpayers that the remittance is automatic and that they must not contact the IRS or their financial institutions asking about the payment timings.
The following are some other important highlights of what the IRS said about the second round of remittance in its news release on the same:
- The direct deposits may appear as provisional or as pending payments in the accounts of some individuals prior to the formal payment date of 4th January 2021.
- Similar to the first round, most recipients will receive the payments via direct deposits. However, Social Security and other recipients who got the first payments through Direct Express will get the second one in the same way.
- The citizens who received the first round of payments but not through direct deposit will receive a check, or in some cases, a debit card. This category of payments should finish in January. In case additional legislation is approved for providing more amount, the already issued Economic Impact Payments will be topped up as early as possible.
- Eligible citizens who did not get any of the two (the first or the second) payments in 2020 can claim it while filing their taxes for 2020, in 2021. The IRS further urges those individuals to review their eligibility while filing their 2020 taxes. Many citizens, including those who have graduated from college recently, might be able to claim the EIP. Do note that you will find the EIP specified as the Recovery Rebate Credit (RRC) on Form 1040 or 1040-SR because the payments are an advance of the RRC.
- The freshly sanctioned COVID-relief legislation makes the second round of payments or EIP 2 as USD 600 for singles while USD 1,200 for married couples filing jointly. The individuals with qualifying children will get an additional USD 600 for each eligible child. Dependents aged 17 or more are not qualified for the child payment.
EIPs are automatic for qualifying taxpayers
The Economic Impact Payments are automatic for those qualifying taxpayers who have filed their tax returns for 2019, Veterans Affairs beneficiaries who did not file a return, individuals with Railroad Retirement benefits and Supplemental Security Income (SSI), or those with Social Security retirement, survivor, or disability benefits (SSDI).
Individuals who successfully registered for the first round of EIP online, via the Non-Filers tool at the IRS.gov before 21st November 2020 or those who filed a simplified return that has been successfully processed by the IRS will also receive the payments automatically.
Who are qualified for the second round of EIP?
Normally, U.S. nationals and resident aliens who do not qualify as dependent on someone else’s tax return are qualified for the EIP 2. The eligible citizens will automatically get an EIP of up to USD 600 for singles or USD 1,200 for duos and an additional USD 600 for each eligible child.
Individuals with an adjusted 2019 gross income of up to USD 75,000 or married pairs filing joint tax returns with up to USD 150,000 will get the full amount of the second round. People having income above the mentioned amounts will receive a reduced payment.
How would you know if the IRS is sending you a payment?
You can use the Get My Payment tool available on IRS.gov to check the status of your payments (both first and second). The tool is available in English as well as Spanish. The IRS is currently updating the tool with new information and anticipates it to be up and running again in a few days. The taxpayers can start using the tool as soon as it is available.
How will you receive your payment from the IRS?
The IRS will utilize the information that is there in its system to send you the new payments. People having direct deposit details on their files will get their payments through direct deposits. For those who do not have their current direct deposit details, they will get the EIP as a debit card or paper check through the mail.
The eligible taxpayers who do not receive the payment due to any reason can claim the same while filing their 2020 tax returns in 2021. It must be noted that the EIPs are an advance of what will be referred to as Recovery Rebate Credit (RRC) on Form 1040 or 1040-SR of your 2020 tax return.
Will you receive a debit card or a paper check?
In case you do not get a direct deposit in your account by early January, you should expect a mail having either a debit card or a paper check. The Bureau of Fiscal Service, a part of the Treasury Department will send a small number of payments via debit card. It is to speedily deliver the EIPs to a maximum number of people.
The form of payment for the second round of mailed EIPs might be different compared to the first one. Some taxpayers who got a paper check in the first round may get a debit card in the second, and some of those who received their payments through a debit card in the first might get a paper check in the next.
The Treasury and the IRS recommend qualifying taxpayers who do not get a direct deposit to carefully watch their mails during this period. They will receive a mail with a paper check or an EIP card sponsored by the Bureau of Fiscal Service and issued by MetaBank, N.A., the financial agent of the Treasury.
You will receive a white envelope having a prominent seal of the U.S. Department of the Treasury that will contain your Economic Impact Payment card. The card will have the VISA name on one side while the issuing institution, MetaBank, N.A. on the other. The included information with the card will help you determine that it is your Economic Impact Payment. You can visit EIPcard.com to know more about these EIP cards.
Are more citizens qualified for an EIP now than before?
Earlier, according to the CARES Act, couples filing jointly with only one amongst them having a Social Security Number (SSN) were normally ineligible for an EIP. However, it wasn’t applied to the members of the military. Now, with the laws modified, the provision has been expanded to make more people eligible for the payments.
As per the current situation, the families are qualified to get payments for the taxpayers as well as eligible children of the family having work-eligible SSNs. If you lie in this group and do not get an EIP, you can claim it while filing your 2020 income tax return under the Recovery Rebate Credit.
Do you need to take any action if you are a railroad retiree, a Social Security beneficiary, or receiving veteran’s benefits?
Most individuals who are railroad retirees, Social Security retirement and disability beneficiaries, or receiving veterans’ benefits are not normally required to file a return. If you are one such individual then you are not required to take any action for receiving an EIP.
The IRS has worked closely with the pertinent federal agencies to get the required data for sending out the EIPs in a similar way other eligible benefits are normally paid to people of this group. For those eligible citizens in this group who do not receive an EIP for whatever reason, they can file a tax return for 2020 and claim it.
Are you still qualified for a remittance if you haven’t either filed a tax return or registered for the EIP using the Non-Filers tool?
Yes, you are. Provided, you meet the eligibility criteria. However, you would not get an automatic payment now and would require to claim it as a Recovery Rebate Credit while filing your income tax return for 2020, in 2021.
Will you get anything for your tax records showing that you received an EIP 2?
Yes, the IRS will send a notice or letter having the amount of your payment, once you have received the payment. You can keep that for your tax records.
Where can you get more information about EIP?
If you wish to have more information regarding the 2020 Recovery Rebate and Economic Impact Payments you can visit IRS.gov/eip. You can also check your payment status through IRS.gov/GetMyPayment. For getting information on other COVID-19-related tax reliefs, you can visit IRS.gov/Coronavirus.
The novel coronavirus has had an impact of gargantuan proportions on all human lives across the world. It has not only taken millions of lives but has also turned it upside down for the rest of us. While the world continues to fight tooth and nail against one of the deadliest viruses in the history of humankind, the U.S. government, the IRS, and other relevant institutions are committed to establishing life back to normalcy.
The Economic Impact Payments under the CARES Act testifies their resolve to minimize the impact of COVID-19 on American lives. The IRS, along with the Treasury Department is working tirelessly to send the second part of the stimulus payments as soon as possible. They have even worked throughout the Christmas and new year holidays to not only make sure the remittances reach you quickly but also prepare for the forthcoming 2021 tax filing season so that you and other taxpayers do not face any difficulty while filing amidst the pandemic.