At the end of 2020, the new $900 billion coronavirus relief package became law. This relief expanded the existing "Economic Impact Payment" program with an additional $600 stimulus payment to taxpayers provided that they had previously filed a 2019 tax return. Unlike the first economic impact payment released in April of 2020 where the IRS determined the amount of the payment based on either a taxpayer's 2018 OR 2019 tax return, this payment is again only based on the taxpayer's 2019 tax return.
So that we can help you avoid getting costly repayment letters from the IRS, it is imperative that we know the exact amount of stimulus payments you receive in both the first round and second round payments. Please save proof of payment and provide it with your tax documents this year for verification.
Here is a brief rundown on the facts for this second payment:
- Just like the first stimulus payment in April of 2020, the second payment is TAX FREE.
- The payment is $600 per taxpayer on the already filed 2019 return. Married individuals filing a joint 2019 return could receive up to $1,200 total.
- Additional payments of $600 will be given for each CHILD reported as a dependent on the tax return, however, this payment does NOT include dependents over the age of 17. Again, this extra payment is only for dependents under the age of 17.
- If your filing status is Single and your AGI is under $75,000, you can expect to receive the full $600. After $75,000 it starts to become a smaller payment and if your AGI is $87,000 or above, you won't receive any payment.
- If your filing status is Head of Household and your AGI is under $112,500, you can expect to receive the full $600. After $112,500 it starts to become a smaller payment and if your AGI is $124,500 or above, you won't receive any payment.
- If your filing status is Married Filing Joint and your AGI is under $150,000, you can expect to receive the full $1,200. After $150,000, it starts to become a smaller payment and if your AGI is $174,000 or above, you won't receive any payment.
- Payments should have started being direct deposited into taxpayers bank accounts on January 4 if the taxpayers had a bank account on file with their 2019 tax return.
- Those without a bank account on their 2019 return will either receive a paper check in the mail OR receive a debit card through the mail (so be on the lookout for it and don't throw it away).
- If you are unable to receive the stimulus check, or only receive a partial amount, due to AGI limitations, the stimulus payment will appear as a refundable tax credit on your 2020 tax return that we are preparing for you this calendar year.
- You can check the status of your stimulus check using the IRS's "Get My Payment" tool which you can access with this link: (https://www.irs.gov/coronavirus/get-my-payment). This tool updates once a day and will show you how your money is being sent to you.
For more information, be sure to check the IRS's website by going to: https://www.irs.gov/coronavirus/second-eip-faqs