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Friday, May 14, 2021

Third Stimulus Check Follow-up: Why You Should Get Your Plus Up Payment?

Even as the final round of stimulus checks arrives in many American’s homes, the IRS has begun sending out the plus-up payments beginning this month. They’re catch-up payments for any amount due to those who have already received a stimulus payment of up to $1,400.

The amount you received was based on the information in the last tax return filed. So if you have not filed your 2020 returns, the IRS based their calculation on your 2019 returns.

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 Most people had it bad in 2020 and incomes were much lower for most. For others, it was a joyous occasion as they welcomed a new member to the family. but the stimulus payment schedule clashed with the tax filing season and many payments sent out were not complete. And it needed a plus-up payment to correct the short payment.

Why Was A Catch-Up To The Stimulus Check Needed?

This fall in income or increase n the number of dependent after they had filed their return on which the stimulus check was based meant that they had been got less. The plus-up payments are to compensate people for this difference.

So all you need to do is to file your tax returns for 2020 before the May 17 deadline. You would be thus sending out all the information the IRS needs to give you the pending amount. The IRS will do the rest and send out the balance amount.

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The $1,400 figure hasn’t been sent to all. The final amount depends on several factors including your actual income as revealed in your account. The IRS based their calculations on the Adjusted Gross Income. the threshold income for individual filers is $75,000. If your earnings in the last return filed were below that, you got the full $1,400.

 The amount phased out between $75,000 and $80,000. Beyond that, you receive nothing. The corresponding figures for heads of household are $112,500 and $120,000. For married couples filing jointly, it is $150,000 and $160,000.

The addition of a member in 2020 entitles you to an additional amount of $1,400 max. As this piece of information was not with the IRS when you filed your last returns, you will receive it only as a plus-up payment.

A Broader Pool Of Beneficiaries

stimulus check
Stimulus Check

Kids over the age of 16 have also been added to the list of dependents this time. Your stimulus check swells by the same amount as you get for every dependent added including older dependents with certain disabilities.

The income threshold for the stimulus check also increases by $5,000 for every eligible dependent. But the method of calculation remains the same.

As the returns overlapped with the third stimulus payments, many payments were sent out even before people could file their latest returns in 2021.

A Sliding Economy Increased The Number Of Beneficiaries

The economy saw its highest one-year loss since the Second World War. It shrank by as much as 3.5%. And it is the low-wage earners who have suffered the most. 9.5million people who lost their jobs are yet to get another one.

Even in March this year, close to 16.9 million people had to go in for unemployment benefits. And pay declined across industries, save for a few.

Getting Your Stimulus Check If You Haven’t Already Received It

Stimulus Check
Stimulus Check

If you are a non-filer, there are chances that you might not have received any stimulus payment. So the easiest way to ensure that you receive your stimulus check is to immediately file your returns, even if you are non-filer.

You can use a Free File service provided by the IRS to file your returns for 2020. Leading tax software providers will provide their products free online through it. This service is for taxpayers with an AGI of $72,000 or below.

The IRS has also provided the help of volunteers at more than 11,000 sites to help out people. This service is available on your mobile phone or by calling 800-906-9887.

How Will I Receive The Plus-Up Payment?

The plus-up payment will go out automatically once your 2020 returns are filed. This payment only applies to the third stimulus payment, not the initial two sent out in the middle and end of 2020.

If you have received your original stimulus payment through direct bank transfer, expect your plus-up payment to come the same way. So monitor the account or your mailbox depending on how you received your initial stimulus payment this year. If it has been sent through the mail in the form of a paper check or a preloaded debit card, track your mail through the free tool of the US postal service.

When Is It Necessary To File A Payment Trace?

You should get your stimulus payment within five days if it is sent through a direct bank transfer. A mail should take around four weeks. If the check has been mailed to a forwarded address, the maximum time it should take is 6 weeks. Check sent to a foreign address should take around 9 weeks. If it takes longer than that, you should file a payment trace with the IRS.

You first need to check the status of your stimulus payment on the tracker tool set up by the IRS. The Get My Payment tool will reveal your payment status if the amount has been scheduled.  You will also know the date and the payment method, whether direct deposit, mail, or any other medium.

And if the Get My Payment portal reveals that your payment was sent and you have not received it for a reasonable period as given above, you should go in for a payment trace.

Getting The Confirmation Letter And Filing A Trace

This letter also called Notice 1444, Your Economic Impact Payment contains all details about the payment sent. You should retain it as it might help you to file a payment trace.

You will need a Form 3911, Taxpayer Statement Regarding Refund. The IRS provides clear instructions to complete the same.

EIP3 should be written at the top of the form. There is other information regarding your payment that you need to answer. The type of return should be marked as ‘Individual’ in item 7, section 1. The tax period should be entered as 2021. The date filed box should be left blank.

How Long Does It Take To Process The Stimulus Check After A Payment Trace?

The IRS will issue a duplicate stimulus check if the original was lost in transit. It normally takes six weeks after the IRS receives a request for a payment trace. but the shortage of staff has been delaying the process in recent weeks.

The IRS has been working to send out additional stimulus checks this week. However, Washington lawmakers are looking for more ways to release payments into 2022. In March, 10 senators, including Bernie Sanders and Elizabeth Warren, asked President Biden for the inclusion of regular stimulus in the next bill.

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