The third stimulus check already hits some bank accounts, just one day after President Joe Biden signed the U.S. bailout law. But while some households will see the funds within the next few days, others may wait longer.
About 85% of people will receive one of the $ 1400 checks, Mr. Biden said Friday. But it is likely that some problems that have halted the delivery of some people in the previous two rounds could cause a recurring situation. For example, some people who did not have a bank account with the IRS during the previous two rounds of checks had to wait a few weeks for debit cards or paper checks to reach their homes.
It is very likely that people who have submitted their tax returns for 2020 or 2019 and have a bank account with the tax agency will quickly receive their stimulus checks by direct deposit, based on the advance payments. This is because the IRS gives priority to issuing the stimulus money quickly to those it knows can reach it – and it’s a huge 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 your stimulus test,” a TurboTax spokesman told CBS MoneyWatch in an email. “The IRS determines eligibility based on your last tax return (2019 or 2020) and will likely send your payment to the bank account where your tax refund was deposited.”
The TurboTax spokesman added: ‘If you have not yet submitted your 2020 return, you can do so now to provide your most recent information to the IRS, including bank account or address information to ensure your stimulus test is correct place go. “
One financial institution told CBS MoneyWatch that it began receiving payments from the IRS for its customers at 11:00 a.m. Friday. The bank, Current, said customers received their stimulus payments faster because some updated their bank account information with the IRS when they filed their tax returns for 2020 – adding that some accounts received stimulus payments up to $ 9,800.
Although some payments land just one day after the bill is signed, the IRS is required by law to distribute the checks by the end of 2021.
This is what can deter some people from receiving their money or receiving the wrong amount.
You have not submitted your tax returns for 2019 or 2020
Many people have probably not yet submitted their tax returns for 2020, as the deadline for submitting your tax forms is April 15th. In that case, there is no need to worry – the IRS will use your tax return for 2019 to determine how much you should receive.
But it is becoming more difficult for people who do not have to file tax returns, such as those with no or very little earnings, which may be the case for some people who work on social security.
It became a problem with the first round of stimulus tests, especially since many of these people needed the first round of $ 1,200 payments the most – and it was not a small number. The IRS said it handed out more than 22 million stimulus payments last year that were not based on tax returns.
As a result of the problem, the IRS last year created a website specifically for non-filers, where they could provide their bank account information or addresses to the agency, as well as their number of dependents, each eligible for $ 500 in stimulus assistance. at that point.
But the website for non-applicants has been closed since the end of last year, and IRS and Treasury officials said at a Friday conference with reporters that they are asking non-applicants to file a 2020 tax return to ensure that they get all the payments and tax credits. they are indebted.
You have submitted a paper return
The IRS warned earlier this year that people submitting paperwork could face delays. This is because the IRS is still dealing with a logjam of tax returns submitted in 2019 – and it is likely that the processing submitted on paper will also experience delays in processing.
The tax agency’s backlog is partly due to the pandemic, which led the IRS to shift its workers to remote work. When that happened, it stored paper tax returns in trailers until it could reach them. At the end of January, it still had 6.7 million yields awaiting processing.
People must file an electronic return in 2020 to process their taxes faster, as well as their refunds and stimulus payments, IRS and Treasury officials said Friday.
You have moved or changed your bank account
This can be of concern to people who have recently received a check or prepaid debit card, but also to people who have changed their bank accounts.
The IRS has said it will open its “Get My Payment” tool on IRS.gov next week. The website 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 see if the bank account information for consumers is correct.
The downside: if a check is issued to a closed or incorrect account, the IRS must reissue the payment in a check and send it to your home. This may contribute to your waiting.
You have new or older dependents
Some people can get their checks quickly, but find that the amounts are wrong – this could very well be due to their dependents.
The third stimulus test gives dependents the right to receive $ 1400 each, but in some cases the IRS may not be aware of your children. 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 the new child will not show because they do not. born.
For example, a couple with a baby born in 2020 should receive $ 4,200, but if the IRS does not have their tax return for 2020, it will pay $ 2,800 for the two adults in the family. But IRS and Treasury officials said Friday that families in this situation can be assured that they will eventually receive another $ 1,400 for their baby.
When they file their tax return for 2020, the IRS will look into whether they owe 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 issues may arise for people who do not normally file tax returns, and who last year used the non-filing tool to report their dependents. Because the first two rounds of checks excluded dependents over the age of 17, the IRS did not count older teens and adults dependent on the non-file tool.
People who do not normally file taxes are asked to file a 2020 return this year, the Treasury and the IRS said. This will help the IRS determine if they have dependents who qualify for the third stimulus test. It could also possibly unlock other tax benefits that households would not otherwise have claimed, such as the child tax credit or earnings income, both of which expanded in US rescue plan.
You lost income in 2020, but have not yet submitted a return
Some people may also receive less than what their income dropped in 2020, but they have not yet filed their tax returns for 2020. This could happen to a single person who earned $ 90,000 in 2019, which is higher than $ 80,000 to receive a payment, but lost their job in 2020 and earned only $ 45,000 last year.
If the person has not yet submitted their 2020 return, they will not receive any incentive payment, as the IRS will base its calculation on their 2019 return, which has shown that they are not eligible. But once they file their 2020 tax returns with the lower income, the IRS will issue stimulus payment to them, IRS and Treasury officials said.