Even without another coronavirus relief package, some Americans may receive another economic impact payment in 2021.
Most people have either received all the money they’re going to see from the first round of stimulus checks or will get the remainder of their money by the end of the month. However, for some, including those who amended their tax return after economic impact payments were issued, it’s possible they could receive additional money next year.
There are at least four scenarios in which a person could receive a payment in 2021, according to the Taxpayer Advocate Service (TAS), an independent organization within the Internal Revenue Service designed to assist taxpayers. Without a process in place to adjust distributions, in these instances, people must file their 2020 tax returns before receiving any additional money.
When issuing the first round of stimulus checks, the IRS based payments on the most current information it had on file. Given that payments started being sent in early April and the tax filing deadline was pushed to July 15, the IRS’ use of a 2018 return and not a 2019 return may have resulted in a reduced payment.
Get your unlimited Newsweek trial >
For example, if a person gave birth to a child in 2019 but hadn’t filed their return when payments were sent, they wouldn’t have qualified for the additional $500 granted to children under 17 years old. The only way to receive that money is to adjust the difference with the filing of a 2020 tax return, according to TAS.
Another reason a person may have to wait until 2021 for a full payment is if the economic impact payment was based on a return that was later amended or if a person receives certain benefits, such as veterans affairs or social security, but were deemed ineligible because they were claimed as a dependent on someone else’s return.
A fourth situation in which a person could receive additional money in 2021, according to TAS, is if the IRS based payments on an information return, social security or veterans affairs benefits. If a person filed a 2019 tax return or used the Non-Filer tool after economic impact payments were calculated, they can reconcile the differences on their 2020 return.
Get your unlimited Newsweek trial >
As people await full compensation for the economic impact payments afforded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, legislators on Capitol Hill reached an agreement on another round of payments. One of the few things Democrats and White House officials agree on including in a fifth stimulus package, Treasury Secretary Steve Mnuchin said a second round would likely resemble the first payments.
The CARES Act issued $1,200 payments to individuals earning $75,000 or less and $2,400 to joint-filers with incomes of $150,000 or below. An additional $500 was allocated for each child under 17 years of age, a provision that may be expanded if there’s a second round.
The GOP-backed Health, Economic Assistance, Liability Protection and Schools (HEALS) Act would keep payments at $500 but change eligibility to include dependents of all ages. Democrats included the expansion in their House bill, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, and Mnuchin told reporters on August 2, that both sides were on board with a plan for stimulus checks.
While TAS can help taxpayers resolve certain issues with their economic impact payment, they can’t help with any of the situations that require a person to file a 2020 return, according to TAS.
“This is not a good answer for taxpayers,” National Taxpayer Advocate Erin M. Collins wrote of the 2020 return solution in a blog on Monday. “Congress authorized EIPs to assist the tens of millions of Americans who are suffering financial hardships as a result of COVID-19 closures, and many of these individuals need their stimulus payments now.”
Newsweek reached out to the IRS for comment but did not receive a response in time for publication.
p:last-of-type::after, .node-type-slideshow .article-body > p:last-of-type::after {
content: none
}]]>
Comments