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Monday, June 17, 2024

Your third stimulus payment and the things you should probably know about it

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On March 11, the $1.9 trillion American Rescue Plan Act of 2021 was signed into law by President Joe Biden. The legislation includes relief plans for small businesses, the unemployed and for American workers and families. Amongst the numerous provisions, another stimulus package offering a third round of stimulus relief to Americans across the country was approved. You may have already received your check or may still be waiting, but there are still a few things about this payment that you should keep in mind.

Payments are already on their way!

The IRS & US Treasury are moving quickly, issuing stimulus payments even faster than before. As of March 17th, the IRS began direct depositing the third round of stimulus checks to over 90 million taxpayer bank accounts. If you know you’re eligible and didn’t get yours yet, no worries, this batch of payments will soon be followed by more direct deposits. Then will come checks or prepaid debit cards heading out in the mail. 

This payment will be more than before

Increased from the previous $1200 and $600 payments, the third round of payments include $1400 per qualifying individual. That’s $1400 for each qualifying taxpayer and dependents. The second stimulus offered in January, by the Consolidated Appropriations Act offered a family of four a $2400 economic relief payment while this stimulus package offers the same family a payment of $5600. 

Not everyone still qualifies

Take into consideration that income levels in this new round of stimulus payments have changed. So now, some people won’t be eligible for the third payment even if they received a first or second stimulus payment or the 2020 Recovery Tax Rebate. Payments will begin to be reduced for individuals with an adjusted gross income of $75,000 and phases out completely at $80,000. Head of Household phases out between $112,000 – $120,000. And AGI limits are $150,000-$160,000 for married filing jointly.  People above these income levels on their most recent tax return (2019 or 2020) are ineligible for a payment.

Not only children dependents qualify for stimulus payments anymore, every dependent on your return does.

The first and second round of stimulus payments were only for qualifying children under age 17. This time, taxpayers will receive a stimulus payment for every dependent with a valid social security number claimed on their tax return. Dependents 17 and older, college students, parents and grandparents and adults with disabilities will also receive the $1400 payment.

Stimulus payments are based on the last tax return processed and most people still don’t have to do anything to get it

The IRS will calculate your stimulus based on the latter of your 2019 or 2020 return, whichever tax return was processed last. Information submitted via the IRS Non-Filer portal will also be used to calculate payments. 

Taxpayers who don’t file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement Benefits, Supplemental Security Income (SSI) or Veterans Affairs Benefits will still receive their payments from the IRS automatically. 

You can track your payment

The IRS’ Get My Payment tool allows taxpayers to track their payments. It’s updated once a day with current information to track your third stimulus check. Be sure to have your information available, as you’ll need it to check your status.

Remember to watch out for scammers and bamboozlers

While taxpayers are relieved to receive a helping hand, there are others who are just as excited to get their hands on your payments. Tax scams are nothing new but have definitely reached a new height during the pandemic. Common stimulus scams include suspicious calls, text and “phishing” emails, offering ways to increase your stimulus, help you get it faster or some other way to get your private information. So beware and remember the IRS won’t email you, they’ll never call you demanding immediate payment and will always begin initial contact via mail. If you think your being scammed, report it immediately by contacting the Indiana Attorney General’s office.

If you haven’t filed a return for 2019 or 2020, there’s still hope for receiving your payment. The IRS is urging taxpayers who don’t normally file a tax return to look into their filing options as soon as possible. If you file a 2020 tax return, you can still claim the Recovery Rebate Credit for the first two stimulus payments. Your 2020 tax return can qualify you for the third payment and calculate your amount. For more filing options visit IRS.gov/filing

Brittany Sabalza, enrolled agent, is director of continuing education for Pro Tax Solutions Indianapolis and a tax columnist.

For more tax relief information visit: IRS.gov/Coronavirus     

To discover your filing options visit IRS.gov/filingoptions

To report a scam visit in.gov/attorneygeneral

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