As we move into the third round of payments, the stimulus check of $1,400 max has been a pleasant surprise as people have received plus-up checks, over and above the payment that they have already received. This update on their payment status is the result of their latest tax returns having been processed. There is also some additional update on the child support which should clear some confusion.
This round of payment under the American Rescue Plan Act passed by Congress at the beginning of March brings to 130 million the total number of stimulus payments. It comes to around $335 billion, as per data released by the IRS.
Just the latest batch included around 4 million stimulus check payments that were worth about $10 billion. The payment date on these payments was officially March 31, though many received it much earlier.
As we know, the payments included $1,400 for every eligible individual with earnings below the limit stipulated by the government. There was an added payment of $1,400 for every entitled dependent.
The ‘Plus Up’ Payments
The latest batch, the third, of recipients included those who were eligible for such additional payments. This included individuals and families who received the first payment on the basis of their 2019 returns but submitted their tax returns for 2020 after their stimulus was either processed or even received by them. A fall in income, mainly due to the economic crisis caused by the COVID-19 pandemic, would have entitled them to an additional payment.
Other reasons for a ‘plus-up payment could be the addition of a baby into the household in 2020. This wasn’t reflected in the 2019 returns. Other beneficiaries included people who have filed their tax returns for the first time. The IRS had no previous records of such individuals or families.
All such payments, including the additional and revised payments to those whose details were not with the authorities, will be continued hereafter every week, the IRS has said in a release.
The first and most of the second round of payments went to those filing their tax returns for 2019 or 2020. It also included those individuals and families who had given details about themselves with the help of the online non-filer app.
Fresh Rules On Child Support
The child support credit is great for families having children, as it will give eligible parents anything between $3,000 and $3,600 for each child, depending on the age of the child. The maximum will go to children below the age of 5.
The child tax credit is expected to bring down child poverty by more than 40%, as per the report of the Center on Budget and Policy Priorities. This amount is above the $1,400 payments for eligible individuals, families, and their dependents.
Eligibility Guidelines For Dependents
Every dependent could contribute towards the total that a family could get subject to qualifying rules. The qualifying dependent could be anyone, including a child less than 19, a student above 24, or an older relative who is dependent on them for care.
Changes In The ‘Double Dip’ Rule
There is an important change in the child tax credit rules. Parents will no longer receive the ‘double-dip,’ whereby some parents received individual checks for the same child. It was a loophole in the rule that the IRS has rectified this time. This was possible if parents claimed the payment in different years. This caused the IRS to look at two different years to establish eligibility for the previous rounds of the Economic Impact Payments.
But people who have yet to receive the second stimulus check may still end up getting an additional $600. But parents who have opted for alternate custody of a child or other eligible dependents are not eligible to both receive any payments this time.
Child Tax Credit And Garnishment
The third stimulus check or the child tax credit check will not be garnished to cover any child support payment. The same rule applies to any federal or state debt. But private debt could be repaid from your third payment.
The IRS can also withhold a part or the whole of the stimulus payment if it is claimed as a Recovery Rebate Credit at the time of filing of the tax returns. This has resulted in a peculiar situation where eligible individuals who received the full amount of the Economic Impact Payment in advance despite having debts did not have their stimulus check offset. But those who did not receive the full amount could have their check reduced, or deducted when they claim it on their tax returns filed this year.
This issue is being addressed by an independent taxpayer group within the IRS.
The Social Security Beneficiaries Finally Get Their Stimulus Check
Further payments will go out to people who have neither filed their tax returns or have given information to the IRS through the non-filer app. These include beneficiaries under the Social Security scheme, including the SSI, SSDI, and retired Railroad beneficiaries. These groups had their stimulus check delayed as the IRS did not receive the required details about them from the respective departments that had their details.
Another group whose stimulus check was delayed is the beneficiaries under Veterans Affairs. The IRS is working to get through their payments as quickly as possible. Beneficiaries under the Veteran Affairs department do not usually need to file tax returns. They should get their stimulus check by the middle of April, revealed the IRS.
File Your Tax Returns For Your Benefit
Though some people do not need to file a tax return to be eligible for the stimulus check, the IRS has appealed to citizens to file their returns to speed up the process of sending out the payments. This includes beneficiaries under federal schemes who have to give in information on dependents who are qualified to receive a stimulus payment, though the payments will be credited to the account of the person who claims them as a dependent.
It also includes the homeless or the rural poor who neither file tax returns nor receive any federal benefits. The IRS website has provisions for free filing of tax returns for such groups. This option is available for those earning $72,000 or below. Free electronic forms are also available for those earning above $72,000.
There are further benefits in filing the tax returns for 2020 this year. It will enable individuals and families to claim pending amounts under $1200 and $600 under the first and second stimulus payments. It would also enable people to check the status of their stimulus check on the ‘Get My Payment Tool,’ on the IRS website. After filling up for the payment and doing the necessary procedures, the citizens remain hopeful for the next check to arrive.