The third stimulus check is already reaching some bank accounts, just a day after President Joe Biden signed the U.S. bailout law. But while some households will see the funds in the coming days, others may wait longer.
About 85 percent of people will receive one of the $ 1,400, Biden said Friday. But it is likely that some of the problems that hindered the delivery of some people in the previous two rounds could lead to a repeated situation. For example, some people who did not have a bank account registered with the IRS during the previous two rounds of checks had to wait several weeks for debit cards or paper checks to arrive at their home.
People who have filed their 2020 or 2019 tax returns and have a bank account registered with the tax agency are more likely to receive their incentive checks quickly by direct deposit, based on previous releases of payment. This is because the IRS prioritizes getting money out of the stimulus quickly to those it knows can come, and it’s a massive effort, as the tax agency has $ 422 billion in funds to distribute to more than 100 million taxpayers.
“You don’t have to do anything to get stimulus control,” a TurboTax spokesman told CBS MoneyWatch in an email. “The IRS will determine eligibility based on your last tax return (either in 2019 or 2020) and will likely send your payment to the bank account where the tax refund was deposited.”
The TurboTax spokesman added: “If you have not yet filed the 2020 return, you can do so now to provide the latest information to the IRS, including bank account or address information to ensure that your stimulus control goes to the right place. “
A financial institution told CBS MoneyWatch that it began receiving IRS payments for its customers starting at 11 a.m. ET on Friday. The bank, Current, said customers received their stimulus payments more quickly as some had updated their bank account information with the IRS when they filed the 2020 tax return, adding that some accounts had received incentive payments of up to $ 9,800.
Although some payments occur only one day after the invoice is signed, the IRS has until the end of 2021 to distribute the checks, according to the legislation.
This is what could prevent some people from receiving their money or receiving the wrong amount.
You have not filed your 2019 or 2020 tax returns
Probably many people have not yet filed their tax return by 2020, as the deadline to get the tax forms is April 15th. In this case, there is no reason to worry: the IRS will use the 2019 tax return to determine how much it should receive.
But this becomes more complicated for people who are not required to file tax returns, such as those with little or no income, which may be the case for some Social Security people.
This became a problem with the first round of stimulus checks, mostly because many of these people needed more than the $ 1,200 payments from the first round, and it wasn’t an insignificant number. The IRS said last year it distributed more than 22 million stimulus payments that were not based on tax returns.
Because of this problem, the IRS last year created a specific website for those who did not request information, where they could provide their bank account information or addresses to the agency, as well as provide the number of dependents, who were eligible for $ 500 in stimulus aid. at the time.
But the unreported website has been closed since late last year and IRS and Treasury officials said in a conference call Friday with reporters urging those not to file tax returns for the 2020 to ensure they receive all payments and tax credits. they are due.
You have submitted a paper statement
The IRS warned earlier this year that people filing paper tax returns could suffer delays. This is because the IRS is still there which is a logjam of statements filed in 2019, and 2020 statements filed on paper are also likely to be delayed in processing.
The delay of the tax agency is due in part to the pandemic, which caused the IRS to relocate its workers to remote work. When this happened, he stored the tax returns on paper in the trailers until he could get there. At the end of January, it still had 6.7 million returns pending processing.
People should file an electronic return in 2020 to ensure faster processing of their taxes, as well as their refunds and incentive payments, IRS and Treasury officials said Friday.
You have moved or changed your bank account
This can be a concern for people who have received a check in the mail or a prepaid debit card but have recently moved, as well as people who have changed their bank accounts.
The IRS said it will open its “Get My Pay” tool at IRS.gov next week. The site will inform people about the status of their payment, but will not allow them to update their bank account information, Treasury and IRS officials said Friday. However, officials added that the agencies have been working to check if the bank account information they have is correct for consumers.
The downside: If a check is issued to a closed or incorrect account, the IRS will have to reissue the payment on a check and mail it to your home. This could be added to your wait.
You have new or old dependents
Some people may receive their checks quickly, but find the amounts incorrect, which could probably be due to their dependents.
The third stimulus check entitles dependents to receive $ 1,400 each, but the IRS may not be aware of your children in some cases. For example, if you had a baby in 2020 but have not yet filed your tax return, the IRS will rely on your 2019 tax return to determine how much you owe, which will not show the new child why not they had done it is still born.
For example, a couple with a baby born in 2020 should receive $ 4,200, but if the IRS does not have the 2020 tax return, it will issue a payment of $ 2,800 for the two adults in the family. But IRS and Treasury officials said Friday that families in this situation can make sure they eventually get the extra $ 1,400 for their baby.
When they file their 2020 tax return, the IRS will check if they owe them more, as in the case of a baby born last year. If that happens, the IRS will automatically issue the additional $ 1,400 check to the family, officials said.
Similar problems could occur for people who do not normally file tax returns and who used the tool who did not request reports to report their dependents last year. Because the first two rounds of controls excluded dependents over the age of 17, the IRS did not count older adolescents and adult dependents from the tool that did not depend on the file.
People who don’t normally file taxes are asked to file a 2020 return this year, Treasury and IRS officials said. This would help the IRS identify if they have dependents who meet the requirements for third-party stimulus control. Potentially, it would also unlock other tax benefits that those families might not have claimed, such as the child tax credit or the income tax credit. extended to the American rescue plan.
You lost revenue in 2020 but have not yet filed a return
Some people could also receive less than they are entitled to if their income goes down in 2020, but they have not yet filed their 2020 tax return. This could happen to a single person who earned $ 90,000 in 2019, which exceeds the limit. of $ 80,000 to receive a paycheck, but he lost his job in 2020 and only earned $ 45,000 last year.
If that person has not yet filed the 2020 return, they will not receive any incentive payments because the IRS will base their calculation on the 2019 return, which will show that they are not eligible. But as soon as they file the 2020 tax return with the lowest revenues, the IRS will issue them a stimulus, IRS and Treasury officials said.