The third stimulus check already affects some bank accounts just a day after President Joe Biden signed the American Rescue Act into law. But while some households will see the money in days, others may wait longer.
About 85% of people will receive one of the $ 1,400 checks, Mr. Biden said Friday. But it’s likely that some of the issues that hindered delivery for some people in the previous two rounds could cause a repeat situation. For example, some people who didn’t have a bank account with the IRS during the previous two rounds of checks had to wait several weeks for the debit cards or paper checks to reach their homes.
It is very likely that people who have filed their 2020 or 2019 tax returns and registered a bank account with the tax authorities will soon receive their incentive checks via direct deposit, based on the previous rollout of payments. That’s because the IRS prioritizes making the stimulus money available quickly to those it knows it can achieve – and it’s a huge effort, given that the IRS has $ 422 billion in funds to distribute to more than 100 million. taxpayers.
“You don’t have to do anything to get your stimulus check,” a TurboTax spokesperson told CBS MoneyWatch in an email. “The IRS will determine your eligibility based on your latest tax return (2019 or 2020) and will likely transfer your payment to the bank account where your tax refund was deposited.”
TurboTax’s spokesperson added, “If you have not yet filed your 2020 return, you can do so now to provide your most current information to the IRS, including bank account or address details to ensure that your stimulus check is sent to the correct instead. “
A financial institution told CBS MoneyWatch that it started receiving payments from the IRS for its clients starting Friday around 11 a.m.ET. The bank, Current, said customers were getting stimulus payments faster because some had updated their bank account information with the IRS when they filed their 2020 tax returns – adding that some accounts had received stimulus payments of up to $ 9,800.
While some payments come in just one day after the bill is signed, the IRS has until the end of 2021 to distribute the checks, according to the law.
This is what could stop some people from getting their money or getting the wrong amount.
You have not submitted your tax return for 2019 or 2020
Many people probably haven’t filed their 2020 tax returns yet, as the deadline for submitting your tax forms is April 15. In that case, don’t worry – the IRS will use your 2019 tax return to determine how much you should receive.
But this gets trickier for people who don’t have to file a tax return, such as those with no or very low income, which may be the case for some people on Social Security.
That became a problem with the first round of incentive checks, especially since many of these people needed the first round of $ 1,200 payments the most – and it wasn’t an insignificant number. The IRS said it distributed more than 22 million stimulus payments last year that weren’t based on tax returns filed.
Because of that problem, the IRS created a website just for non-filers last year where they could provide their bank account information or addresses to the agency, as well as their number of dependents, each of whom was eligible for $ 500 in incentive aid at the time.
But the non-filers website has been shut down since late last year, and IRS and Treasury officials said in a conference call with reporters on Friday that they are urging non-filers to file a 2020 tax return to ensure that they get all the payments and tax breaks they owe.
You have submitted a paper declaration
The IRS warned earlier this year that people filing paper tax returns could face delays. That’s because the IRS is still there handling a log of tax returns filed in 2019 – and it is likely that 2020 returns filed on paper will also experience processing delays.
The backlog of the tax authorities is due in part to the pandemic, which prompted the IRS to transfer its employees to remote work. When that happened, it kept the paper tax returns in trailers until it could reach them. At the end of January, there were still 6.7 million returns pending processing.
People should file an electronic return by 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 or prepaid debit card but have recently moved, as well as those who have switched bank accounts.
The IRS said it will open the Get My Payment tool on IRS.gov next week. The site will notify people of the status of their payment, but will not allow them to update their bank account information, Treasury and IRS officials said on Friday. However, the officials added that the agencies have been working to verify that the bank account information they have is correct for consumers.
The downside: If a check is issued in a closed or incorrect account, the IRS will have to re-issue the payment in a check and send it to your home. That can increase your waiting time.
You have new or older dependents
Some people may get their checks quickly, but find that the amounts are incorrect – most likely that could be due to their family members.
The third stimulus check gives entitlement holders $ 1,400 each, but the IRS may not be aware of your kids in some cases. For example, if you had a baby in 2020 but haven’t yet filed your tax return, the IRS will rely on your 2019 tax return to determine how much you owe, which the new child won’t show because they didn’t. still born.
For example, a couple with a baby born in 2020 should receive $ 4,200, but if the IRS doesn’t have their 2020 tax returns, 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 rest assured that they will end up getting the extra $ 1,400 for their baby.
When they file their 2020 tax returns, the IRS checks to see if 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 problems can arise with people who don’t normally file a tax return and who last year used the non-filers tool to report their family members. Because the first two rounds of checks excluded dependents over the age of 17, the IRS did not count older teens and adult dependents on the non-filer tool.
People who don’t normally file taxes are urged to file a 2020 return this year, Treasury and IRS officials said. That would help the IRS determine if they have dependents who qualify for the third stimulus check. It could also potentially unlock other tax benefits that those households might not otherwise have claimed, such as the Child Tax Credit or the Earned Income Tax Credit, both of which were expanded in the American rescue plan
You have lost income in 2020 but have not yet filed a tax return
Some people could also receive less than they are entitled to if their income falls in 2020, but they have not yet filed their 2020 tax returns. This can happen for a single person who made $ 90,000 in 2019, which is more than the $ 80,000 mark to receive a payment, but lost their job in 2020, making just $ 45,000 last year.
If that person has not yet filed their 2020 tax return, they will not receive an incentive payment because the IRS will base the calculation on their 2019 tax return, which showed that they do not qualify. But once they file their 2020 tax returns with the lower income, the IRS will make an incentive payment to them, IRS and Treasury officials said.