The government is using the Internal Revenue Service to distribute so-called Economic Impact Payments (EIPs) to many Americans, also known as “stimulus checks.” Singles can receive up to $1,200, married couples can receive up to $2,400.
Your under-age-17 kids are worth up to another $500 each. However, EIPs are phased out at higher income levels — based on your 2019 Form 1040 if you’ve already filed it, or your 2018 Form 1040 if you have not.
Complicating matters is the fact that the IRS is not currently processing 2019 paper returns. (IRS is apparently still processing 2019 electronically filed returns.) The agency is swamped with all the new COVID-19-related tasks it has been given. Worse yet, the IRS’s data processing systems were notoriously inadequate even before getting overwhelmed with all the new tasks.
Meanwhile, we are receiving questions from readers about how the whole EIP scheme is supposed to work in various circumstances. With part 1 this column, I’ll try to answer some of those questions. Full disclosure: I’ve edited them and added a few of my own. Here goes.
Q: What’s the deal with the IRS Get My Payment link?
A: Go to this website and then click on Get My Payment link. You will be asked to supply some basic information and then supposedly find out the status of your EIP. However, this online tool apparently works only if you’ve previously set yourself up to have federal income tax refunds automatically deposited to an account. Well, in that case you should be receiving your money any minute now, if you’ve not already received it. Check with your bank. The Get My Payment link is basically useless for you, because your payment is either already in your account or will be very soon.
Q: What if you are not set up for automatic deposit and are waiting for a paper check?
A: According to the government, your EIP check could take up to five months to arrive. Your payment amount will be based on information on your 2019 Form 1040 if you’ve filed it or your 2018 Form 1040 if you have not. Unfortunately, if you go to the IRS Get My Payment link, you may be unable to learn anything about the status of your check. You may be told that the IRS lacks the information to respond. So pack a lunch, set up a lawn chair in front of your mail box, and good luck to you. If anyone out there has had a different experience with Get My Payment, please let me know with a comment.
Q: My 2019 income was significantly more than my 2018 income. I’ve already filed my 2019 Form 1010. I would have qualified for an EIP using my 2018 income but not using my 2019 income. Is there any way to ‘take back’ my 2019 return so the IRS will only look at my 2018 income for EIP qualification? I’m now unemployed and the money would help.
A: I have bad news and good news. I don’t think there’s any way to “take back” your 2019 return. However, you’ll eventually get your rightful EIP sometime next year, probably way too late to do you much good. The little-known fact is that the EIP is actually an advance tax credit for your 2020 tax year. If your 2020 income is low enough to qualify for the full credit (it probably will be), you’ll receive your rightful $1,200 after you’ve filed your 2020 Form 1040 next year. You’ll use your 2020 return to “true up” your rightful EIP amount. The IRS is using 2019 and 2019 tax return information to get EIPs out as quickly as possible (by government standards). In your situation, you’ll have to wait.
Q: My only income is from Social Security benefits, and I don’t have to file tax returns. My Social Security benefit payments are automatically deposited to my checking account. Will I get an EIP?
A: Yes. You are not included in the first wave of about 80 million EIP recipients, because you did not file a 2019 or 2018 tax return. Folks in that first wave have already received their money or will very soon. You’ll be in the second wave. Your payment will be automatically deposited into the same account used to receive your Social Security benefit payments. Check with your bank periodically. You should not have to wait too much longer. I hope.
Originally Published on MarketWatch
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