Did you just get surprised by a little extra stimulus cash in your bank account?
The Internal Revenue Service said late Thursday that its third batch of payments includes what it calls the first of many “plus-up” stimulus payments.
The “plus-up” payments will continue on a weekly basis going forward, the IRS said, as the IRS continues processing tax returns from 2020 and 2019. Yes, some 2019 returns need to be processed, too.
Under some circumstances, a person could be eligible for a new or bigger Economic Impact Payment based on their recently processed tax returns.
Perhaps a couple’s income fell significantly after a spouse lost a job during the pandemic last year, and they ended up making far less money than they reported on their 2019 income tax return.
Or maybe a parent now qualifies for more money because the 2020 tax return includes a new child or dependent, which would boost the household’s stimulus payout.
Such ongoing supplemental or “plus-up” payments would apply to people who had already received stimulus money earlier in March but the initial payment was based on a 2019 tax return, not the 2020 return that had been recently filed.
A drastic reduction in income in 2020 could make or break whether some people qualify for a full or partial stimulus payment in this third program.
The income cutoff associated with the latest stimulus effort is much lower than the previous two stimulus programs.
The IRS noted that some people won’t be eligible for the third payment even if they received a stimulus payment last year or stimulus payment in early 2021, based on the higher income limits associated with the first two programs.
Under the latest Economic Impact Payment program, which kicked off last month, an individual’s payout begins to be reduced if a single person hits $75,000 or above in Adjusted Gross Income. The individual would not get any stimulus payment if their income is $80,000 or higher.
The stimulus payment for a married couple filing a joint return begins to be reduced when their AGI hits $150,000. The couple would not get any payment if their AGI is $160,000 or higher.
Thus far, more than 130 million stimulus payments worth about $335 billion were issued in the latest stimulus program, according to the IRS, the U.S. Department of the Treasury and the Bureau of the Fiscal Service.
The IRS noted that the most recent batch issued to people involves more than 2 million direct deposit payments worth more than $5 billion. Another 2 million paper checks worth nearly $5 billion also is being issued now.
This third batch began processing March 26, with an official payment date of March 31.
Some people had not received a stimulus payment in the first two early batches because the IRS said it did not have enough information to issue a payment. But now those people are seeing stimulus money after recently filing a tax return that provides more information and indicates they now qualify for an Economic Impact Payment.
“Payments to this group – and the ‘plus-up’ payments noted above – will continue on a weekly basis going forward, as the IRS continues processing tax returns from 2020 and 2019,” the IRS said.
Starting Friday, the IRS said a large batch of payments will begin going to Social Security and other federal beneficiaries who didn’t file a 2020 or 2019 tax return and didn’t use the Non-Filers tool last year.
“These payments will go to Social Security retirement, survivor or disability(SSDI), Supplemental Security Income (SSI), and Railroad Retirement Board (RRB) beneficiaries,” the IRS said.
While the payments to federal beneficiaries will begin to be issued this weekend, the majority of these payments will be sent electronically and have an official payment date of April 7.
Those receiving Veterans Affairs benefits will need to wait longer. Currently, the IRS estimates that Economic Impact Payments could be issued by mid-April to VA beneficiaries who do not regularly file tax returns.
By: Susan Tompor (finance.yahoo.com)