December 22, 2020
What You Need to Know About the New Stimulus Bill: Economic Impact Payments, Unemployment Benefits, and More
Updated January 27, 2021
In December 2020, Congress picked up negotiations around a new stimulus package, worth approximately $900 billion, that would provide relief to the U.S. economy and Americans still struggling during the pandemic. The big question is – will there be another stimulus payment? If so, how much should you expect to receive? Here’s what you need to know.
According to reports, the new proposal includes:
The new stimulus payment is $600 per eligible adult and $600 per dependent child.
If you earned $75,000 or less in adjusted gross income in 2019, or $112,500 or less in adjusted gross income as a head of household in 2019, you will receive the full payment of $600. Payments are reduced by $5 for every $100 over the applicable threshold, phasing out after $87,000 for individuals and $124,500 for heads of household.
If you filed as married filing jointly and reported up to $150,000 in adjusted gross income combined in 2019, you will receive $1,200. For joint filers, payments are reduced by $50 for every $100 over the threshold and phase out after $174,000.
Parents of dependent children under age 17 are eligible for an additional $600 per qualifying child.
For those who qualify, payments were released in batches, with the first batch released the week of December 28, 2020. According to the IRS, paper checks began to be mailed on December 20, 2020.
Those who qualify and have direct deposit information on file with the IRS likely already received their payments. If you do not have direct deposit information on file with the IRS, you may receive your payment via paper check or a government-issued prepaid card. The IRS is not offering the ability to change or add new direct deposit information at this time in order to protect against fraud.
The IRS has reopened the Get My Payment portal, enabling anyone to check the status of their payment. Visit the portal here.
The IRS has experienced issues sending stimulus payments to closed temporary bank accounts, particularly those associated with accounts on file with tax filing services. On January 11, the IRS stated that they will reissue payments to taxpayers who did not receive the second stimulus payment because bank account on file was closed.
These payments will be reissued. If you have been impacted, the IRS wants you to know you do not need to take any action or call the IRS. Learn more here.
The IRS will reference your 2019 tax return to determine if you’re eligible for a second stimulus payment. If you haven’t filed your taxes for 2019, you may not receive a payment.
If you are eligible and do not receive the full amount of the stimulus payment for any reason, you can claim the Recovery Rebate Credit on your 2020 Form 1040 or Form 1040-SR tax return. You can learn more about eligibility on the IRS website.
A third coronavirus relief package, including $1,400 stimulus checks for qualifying Americans, has been proposed. However, no new bill has yet been passed yet.
Most people received their Economic Impact Payment to the account on file with the IRS for tax refunds, via paper check, or via a government-issued prepaid card. If you did not file taxes in 2019 with the IRS, you could register online by providing your information using the IRS Non-Filer Tool. The deadline to register online for the first stimulus payment was November 21, 2020. If you missed the deadline, you may still be eligible to receive a payment in 2021 via the Recovery Rebate Credit, according to the IRS. Learn more here.
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1. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.