Some Americans are in line to get extra money from the government if they do not receive as much as they were entitled to the three stimulus checks authorized so far by Congress. But the IRS warns that some people may not get as much money as they expect.
The tax agency now sends these “plus-up” payments to people who have not obtained full payments from the three rounds of federal stimulus checks, each of which has its own eligibility thresholds and amounts. payment. The IRS said it now sends extra payments as it processes the 2020 tax returns, which may indicate that some people are owed more money.
Some of those additional payments will land in accounts today or soon arrive in the mail by check or prepaid debit card, the IRS said Wednesday. About 25 million payments, worth $ 36 billion, were said to have been distributed, with an official payment date of April 7, although only about a million of these represent “additional” payments.
There are several reasons why people can get a “plus-up” check. While the three rounds of stimulus payments provide money for dependent children, people who had children in 2020 may not have received all three payments for their children. This is because the IRS has relied on a family’s most recent tax return to determine their payment, and the first two payments were issued before the start of the 2020 fiscal season. ‘The IRS would have relied on 2019 returns for the first two checks. Because these 2019 statements would not have included information about children born in 2020, the agency would not have sent these payments.
The 2020 tax filing season, however, gives people a second chance to claim incentive money that is owed to them but has not yet been received. The IRS says there are two ways to do this.
- First, they can request a correction to the 2020 tax return using the “Recovery Bonus Credit,” found on line 30 of Form 1040, for the first two incentive payments. This additional money will be sent with the tax refund.
- Second, if the IRS has already sent you the third stimulus check, but they owe you more based on your 2020 tax returns, the IRS will automatically adjust the payment after you file the taxes, with what is called a “plus-up” check. This could happen to people with higher incomes whose incomes were reduced in 2020, which will allow them to opt for one or all incentive payments, for example.
Of course, figuring out if and how much you owe is complicated and may require an active effort from the people to whom you owe the most money. On the one hand, the IRS says that people who do not normally file tax returns, as in the case of some low-income households, must file a tax return to get their extra money for both. first checks using the recovery bonus credit.
“You must file a 2020 tax return to claim a recovery bonus credit, even if you are not required to file a tax return,” the IRS said earlier this year.
Some people may see smaller recovery bonus credits than they expect if they owe money to the federal government or state agencies. Federal and state debts will be removed from any payment of additional incentives that claimants would otherwise have received. But the IRS said there is one exception: it will not withdraw money for overdue income taxes, effective March 18th.
Less than expected? It may depend on dependent people
Now the IRS warns that some people may get smaller adjustments to the recovery bonus credit than they might expect. If you fill out line 30 of Form 1040, the IRS will check your claim, and if there are problems, you may not get what you expect, the agency said.
If that happens, the IRS said it will send a letter or notice explaining any changes, but also warned that this problem could lead to a “slight delay in processing the return.”
Two potential pitfalls are related to dependents and the different payment amounts and eligibility rules that applied to each round of incentives, according to the IRS. For example, the first round of stimulus checks provided $ 500 per eligible dependent, the second $ 600, and the third distributed $ 1,400 per child.
In addition, the first two checks included an age limit for eligible dependents, excluding teenage dependents over the age of 17 from payment. The third check provided $ 1,400 for each dependent, regardless of age.
There would be a problem if people claimed an additional $ 500 or $ 600 for the first two checks on their tax return, but their child had already turned 17 on January 1, 2020. If that is the case, the The IRS says those children are not eligible for the first two stimulus checks and the taxpayer is unlucky to get that adjustment.
The second deficit could occur if a child was claimed as dependent on another person’s tax return for 2020. This could happen in the case of divorced or divorcing parents, for example. The person claiming the child as a dependent on their tax return must receive stimulus control. But some divorced parents alternate years when they claim their children as dependents, which can complicate the problem. According to the tax website 1040.com, only parents who claimed their child for their 2020 taxes should receive the recovery bonus credit adjustment.
Mathematical mixes and Social Security numbers
Other problems can also lead to lower-than-expected payments, such as mathematical errors in filing taxes. This can affect your adjusted plus or payout if you miscalculated your adjusted gross income because your AGI determines your eligibility threshold for incentive money. (Higher-income households were excluded from the three controls).
The IRS also warns that if you do not provide a valid Social Security number for employment, you will not be able to earn extra money through the recovery bonus credit. This is because the first two checks required that at least one applicant from a household have a valid Social Security number to qualify, which excluded some immigrant families.
The third control, however, extended eligibility to allow children with Social Security numbers to obtain the necessary requirements, even if their parents only have an individual taxpayer identification number (ITIN), which it is common among undocumented immigrants and other non-citizens who are not eligible Security Numbers.