To: All My Clients and Associates:
We want to wish you a Happy New Year 2021. We want to start this year on a positive note with information related to the Economic Impact Payments.
The Internal Revenue Service and the Treasury Department is delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year.
The initial direct deposit payments started on December 29 and will continue into next week. The IRS began sending Paper checks on Wednesday, December 30.
The IRS emphasizes that there is no action required by eligible individuals to receive this second payment. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021. The IRS reminds taxpayers that the payments are automatic, and they should not contact their financial institutions or the IRS with payment timing questions.
As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. Social Security and other beneficiaries who received the first round of payments via Direct Express will receive this second payment the same way.
Anyone who received the first round of payments earlier this year but didn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will conclude in January. If additional legislation is enacted to provide an extra amount, the Economic Impact Payments issued will be topped up as quickly as possible.
Eligible individuals who did not receive an Economic Impact Payment this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021. The IRS urges taxpayers who didn’t receive compensation this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs is an advance payment of the RRC.
Payments are automatic for eligible taxpayers.
Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, and Supplemental Security Income (SSI), and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by November 21, 2020, or who submitted a simplified tax return that has been processed by the IRS.
Who is eligible for the second Economic Impact Payment?
Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Qualified individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, suppose you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses. In that case, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
How do I find out if the IRS is sending me a payment?
People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information; this tool is available now.
How will the IRS know where to send my payment? What if I changed bank accounts?
The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the compensation that way. Those without current direct deposit information on file will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.
Will people receive a paper check or a debit card?
Those who don’t receive a direct deposit by early January should watch their mail for either a paper check or a debit card. To speed delivery of the payments to reach as many people as soon as possible, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card. Please note that the form of payment for the second mailed EIP may be different from the first mailed EIP. Some people who received a paper check last time might receive a debit card this time, and some people who received a debit card previously may receive a paper check.
The IRS and The Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period for a check or an Economic Impact Payment card. Which is sponsored by the Treasury Department’s Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A. The Economic Impact Payment Card will be sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. It has the Visa name on the front of the card and the issuing bank, MetaBank®, N.A., on the back of the card. The information included with the card will explain that this is your Economic Impact Payment. More information about these cards is available at EIPcard.com.
Are more people eligible now for payment than before?
Under the earlier CARES Act, joint returns of couples where only one member had a Social Security number were generally ineligible for payment – unless they were a military member. But this month’s new law changes and expands that provision, and more people are now eligible. In this situation, these families will now be eligible to receive payments for the taxpayers and qualifying children who have work-eligible SSNs. People in this group who don’t receive an Economic Impact Payment can claim this when they file their 2020 taxes under the Recovery Rebate Credit.
Is any action needed by Social Security beneficiaries, railroad retirees, and those receiving veterans’ benefits who are not typically required to file a tax return?
Most Social Security retirement and disability beneficiaries, railroad retirees, and those receiving veterans’ benefits do not need to take any action to receive a payment. Earlier this year, the IRS worked directly with the relevant federal agencies to obtain the information necessary to send out the new payments the same way benefits for this group are typically paid. For eligible people in this group who didn’t receive the money for any reason, they can file a 2020 tax return.
I didn’t file a tax return and didn’t register with the IRS.gov non-filers tool. Am I eligible for a payment?
Yes, if you meet the eligibility requirement. While you won’t receive an automatic payment now, you can still claim the equivalent Recovery Rebate Credit when you file your 2020 federal income tax return.
Will I receive anything for my tax records showing I received a second Economic Impact Payment?
Yes. People will receive an IRS notice or letter after receiving a payment telling them the amount. They should keep this for their tax records.
Where can I get more information?
For more information about Economic Impact Payments and the 2020 Recovery Rebate, key information will be posted on IRS.gov/eip. You can check the status of your payment at IRS.gov/GetMyPayment. For other COVID-19-related tax relief, visit IRS.gov/Coronavirus.
If you have any questions or concerns regarding these payments, please call my office at:
Julio & Staff Members.