Stimulus Check Update: Track Your IRS Relief Payment

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(CBS Detroit) — The third stimulus check started arriving in bank accounts over a week ago. And, as of last Wednesday, the Internal Revenue Service (IRS) had officially delivered its first batch of payments, numbered at 90 million and valued at $242 billion. The IRS also mailed 150,000 checks valued at $442 million. The total brought it pretty close to its stated goal of delivering 100 million checks by the middle of this week.

The $1,400 relief payment is part of President Biden’s $1.9 trillion economic relief package. The American Rescue Plan Act is designed to ease COVID’s economic fallout and support the economy while it fights the pandemic. The package also contains extended unemployment benefits, an improved child tax credit, and much more. While many people have already received their allotted share of the $422 billion earmarked for stimulus checks, the timeline for others is still playing out. Many factors could contribute to the uncertainty.

When Could My Stimulus Check Arrive?

The American Rescue Plan Act became law ahead of the March 14 deadline, when the previous $300 federal unemployment benefit bonus expired. The IRS, which had twice distributed stimulus checks, started the process again immediately. And people noted economic impact payment (EIP) deposits in their bank accounts within days. Early recipients tended to be people who have bank accounts on file and submitted recent tax returns.

The President has stated that roughly 85 percent of Americans will ultimately receive money. In general, direct deposits arrive more quickly, many over the course of the past week. Paper checks and debit cards, which have to be mailed, could take quite a few weeks. At least that was the case for the previous two payments.

Payments go out in batches, meaning there isn’t necessarily cause for concern yet. The legislation says the government technically has until the end of 2021 to distribute the money. For most people, it won’t take nearly that long.

The IRS has a helpful tool called ‘Get My Payment‘ to let people track the status of their stimulus check.

What Do ‘Get My Payment’ Explanations Mean?

The ‘Get My Payment’ portal came about as a result of the CARES Act, which included the first stimulus payment. The tool is designed to convey helpful information for those expecting stimulus payments. However, it may not always be clear what the IRS is actually saying.

Many people will receive a payment status message that says their payment has been processed. The message will also include a payment date and how the payment is to be sent, meaning direct deposit or mail. Other people will be told that they’re eligible, though the payment is awaiting processing. No date will be given, because it is pending.

‘Get My Payment’ may also say that your payment status is not available. That could mean that the IRS has not processed the payment or the potential recipient is ineligible.

The portal could instead say that more information is needed. That means the post office failed to deliver your payment and returned it to the IRS. The Agency says that the best way to update an address is to submit a 2020 tax return. (‘Get My Payment’ doesn’t allow users to change their address in the system.) Alternatively, a pending recipient can instead submit their bank account information through the tool to have payment delivered electronically.

What Could Delay My Stimulus Check?

Some will inevitably experience delays in receiving their third stimulus check. The IRS is right in the middle of tax season. While CARES Act checks went out around the same time last year, the tax deadline was pushed from April 15 to July 15. The second stimulus check was distributed before the 2020 tax season began. This time, though, the IRS is handling the dual burden of distributing millions of relief payments while accepting and processing millions of tax returns. The tax deadline has been pushed until mid-May, which could relieve some of the burden.

Sending out periodic Child Tax Credit checks is another task that will fall to the IRS. But that isn’t due to to start until July.

Aside from institutional delays, a whole host of personal factors could play into when someone’s money actually arrives. Most of them stem from what information the IRS has on file for you and how they’re allowed to use it.

The IRS needs to have current bank account information, which they’ve used to issue a tax refund. They can’t make a payment to someone using an account and routing number they previously only used to accept payment. The IRS also requires up-to-date earnings and personal information to issue the proper payment. For the first stimulus check, that came from 2018 or 2019 tax filings. For the second stimulus check, it came from 2019 tax filings. The IRS is pulling that information from 2019 or 2020 tax filings this time around.

So anyone who doesn’t have up-to-date information on file with the IRS could be looking at delays. That may include someone who recently moved or changed banks. It might also include someone who hasn’t filed a tax return for 2019 or 2020. Many people don’t file tax returns because they don’t make enough money to pay taxes. Not coincidentally, these are also generally the people who most need stimulus payments.

Certain banks have policies that can delay the arrival of stimulus via direct deposit. For example, some JPMorgan Chase and Wells Fargo customers expressed dismay that money the government initially sent out took days arrive in their accounts. Some smaller banks, however, credited the money to their customers right away. The actual settlement date for the first batch of ACH transfers was March 17, meaning that was the day that the money was officially available to banks. The two financial institutions receiving complaints waited until the money actually arrived rather than crediting it in advance. The same scenario could hold up payments the next time around.

Another potential delay stems from the method people use to file their taxes. Those who submit returns by mail may also experience delays in receiving their stimulus payment. Paper returns take longer to process than electronic returns, and the agency is experiencing a backlog brought on, at least in part, by the pandemic. As with most office workers, many IRS employees have had to do their jobs from home. Paper returns were inaccessible and sat waiting in trailers. About 6.7 million returns had yet to be processed by the end of January.

What If The Amount Is Wrong?

The topline $1,400 number that’s drawn so much attention won’t necessarily be what people receive. The actual amount could change based on income restrictions, the number of dependents and other factors.

This stimulus package phases out checks more quickly than the previous two. So while the income threshold remains at $75,000 ($150,000), those earning $80,000 ($160,000) or more will receive nothing. If the phase out progresses at a constant rate, that would mean people would receive $.28 less for every $1 they earned over the limit. Put another way, that means those with an AGI of $76,000 should receive $1,120, and that total would fall by $280 for every additional $1,000 of income.

The American Rescue Plan expands the pool of eligible dependents to include dependents over the age of 16. In that group are college students and older adults with certain kinds of disabilities. Such a change makes an estimated 13.5 million more people eligible to receive stimulus checks. As an example, what if an adult with two kids and an income under $75,000 also has a third dependent in college? She would receive $5,600 this time around. Assuming the new faster phaseout, that amount would decrease to $4,200 at an AGI of $80,000; $2,800 at an AGI of $85,000; $1,400 at an AGI of $90,000 and $0 at an AGI of $95,000.

Those whose dependent status has changed — perhaps because of a child born last year or a dependent family member who now qualifies for stimulus — may face incorrect payments. The IRS won’t know about a 2020 baby until the parents submit their 2020 taxes. So they would issue $2,800 to a married couple who welcomed their first child last year but had yet to file. Once those parents submit their 2020 taxes, the agency would automatically send out an additional $1,400.

A similar issue could arise with families who don’t typically file but used the non-filer tool to update their dependent count last year. Dependents above the age of 16 weren’t previously included, so the IRS won’t have them on record. Filing a return for 2020 could ensure that they do.

Those without dependents might also see their third stimulus check affected by their taxes. Income changes from year to year, as people receive raises, switch jobs or become unemployed. The first relief payment was passed in March of 2020. At that point, some people had filed their 2019 taxes and some had not. So the check amount could have been based on 2018 or 2019 taxes. The second relief payment became law in December of 2020, after most everyone had filed their 2019 taxes. So that amount was determined by 2019 tax filings.

The third relief payment was signed over two months before the revised federal tax deadline (May 17). The amount could be based on an individual’s 2019 or 2020 taxes, depending on when you file. The past year has seen significant unemployment, which often hurts the finances of individual households. Many others have seen their hours reduced. If your income changed significantly from one tax filing to the next, so too could the amount of your stimulus check.

Why Do We Need Stimulus Checks?

The economy shrank by 3.5 percent in 2020, the largest single-year decline since the end of World War II. Weekly unemployment figures remain historically high, with approximately 770,000 people initially applying for unemployment insurance in the second week of March. (For reference, a typical pre-pandemic week saw about 250,000 new unemployment applications.) An additional 282,000 sought Pandemic Unemployment Assistance.

Approximately 18.2 million people were receiving unemployment benefits of one kind or another as of the end of February. That’s roughly one out of every nine workers. While the official unemployment rate is 6.2 percent, the actual rate is probably closer to 10 percent, given all the people who have dropped out of the labor force. On the bright side, employers added another 379,000 jobs last month.

An economic bounceback depends on the widespread distribution of a COVID vaccine. And efforts to inoculate the public are progressing. Shortages and winter weather had forced some areas to temporarily close vaccination centers and scale back administering the vaccine. Many who qualify had faced problems in scheduling appointments. Nevertheless, Americans have received over 124 million doses, with 24.5 percent of the population having received at least one dose and 13.3 percent completely vaccinated. Vaccination numbers continue to increase at a rate of about 2.6 million doses per day.

The Food & Drug Administration recently authorized Johnson & Johnson’s one-shot vaccine, with millions of doses already shipped. Biden has recently stated that the country will have enough doses to vaccinate all Americans by May. Actually putting needles in arms will likely take longer. Mask-wearing and a general lack of normalcy could continue into 2022. Currently, domestic COVID cases are approaching 30 million, while deaths exceed 542,000.

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