A third round of the Economic Impact Payments (EIP) was approved under the American Rescue Plan of 2021 which was passed and signed into law on March 11, 2021.
Under the Act, the EIP will provide payments up to $1,400 for individuals or $2,800 for married couples, plus an additional $1,400 for each dependent. Unlike the prior rounds of EIP, families will get a payment for all their dependents claimed on a tax return, not just their qualifying children under 17.
Be on the alert for possible scams. The IRS will not call, text, email or contact individuals on social media asking for personal or bank account information, even related to the economic impact payments or refunds.
Description of the Payment
The third round of the Economic Impact Payment (EIP) began on March 12, 2021 and provides a one-time direct cash payment up to a maximum of $1,400 for individuals or $2,800 for married couples, plus $1,400 for all dependents claimed on a tax return regardless of age.
Individuals will receive the maximum payment if the household’s adjusted gross income (AGI) in tax year 2020 (or 2019 if a return for 2020 has not been filed) is less than:
- $75,000 for individuals or married couples filing separately
- $112,500 for head of households
- $150,000 for married couples filing jointly
Payments will be gradually reduced if adjusted gross income is between
- $75,000 and $80,000 for individuals or married couples filing separately
- $112,500 and $120,000 for head of household
- $150,000 and $160,000 for married couples filing jointly
- The amount of the payment will be based on the taxpayer’s Adjusted Gross Income (AGI).
Note 1: The phaseout threshold (the amount at which point there is zero stimulus money) is lower in this act than the previous act, which means many families will unfortunately phaseout out sooner.
Note 2: The amount of the stimulus payment is not taxable. When filing for tax year 2020, there is need to report the payment as income on the return.
Qualifying for the Payment
The following qualify for the stimulus payment:
- Have adjusted Gross Income (AGI) in 2020 (or 2019 if 2020 return is not filed or processed) below the guidelines listed above under Description of the Payment.
- Qualifying children under 17 years old, as defined by the IRS tax code for the Child Tax Credit.
- Qualifying dependent(s) claimed on a federal 2020 tax return (or 2019 return if a 2020 return has not been filed or processed) with a valid SSN or Adoption Taxpayer Identification Number issued by the IRS.
- Must be a U.S. citizen or a qualifying resident alien (https://www.irs.gov/individuals/international-taxpayers/determining-alien-tax-status) with a valid social security number.
Visit: https://www.irs.gov/coronavirus/economic-impact-payments for a tool to help determine eligibility.
For detailed information on eligibility for incarcerated individuals, adopted/foster care children, resident of Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam or the Commonwealth of the Northern Mariana Islands, if living abroad, visit: https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment.
Accessing the Payment
The IRS began delivering payments on March 12, 2021.
No action is necessary for most qualifying households. Payment is issued based on the information the IRS has on file for 2020/2019 tax return, information households provided on the IRS Non-Filers tool (now defunct), payment information entered on the Get My Payment tool, or information provided by a federal agency that issued benefits to the household (Social Security Administration, Veteran Affairs, or Railroad Retirement Board.)
For more information visit: https://www.irs.gov/coronavirus/economic-impact-payments
Eligible individuals who never received, or did not receive the full payment amount for the first and second round of the Economic Impact Payment, may be able to claim the Recovery Rebate Credit. Visit: https://www.irs.gov/newsroom/recovery-rebate-credit.
Note 2: The amount of the stimulus payment is not taxable. When filing for the 2020 tax year, the payment should not be reported as income.
CHECK THE STATUS OF PAYMENT
To check the status of your payment and to update IRS with bank account information use the Get My Payment portal. To update mailing address when a household has moved since they last filed, visit https://www.irs.gov/taxtopics/tc157.
How Payments are Received
The IRS will send the third round of payments the same way first payment was sent: by direct deposit, mailed check, or debit card. Social Security and other beneficiaries who received the first round of payments via Direct Express will receive this third payment the same way.
If the IRS has the individual’s bank account information, it will transfer the money via direct deposit. If the bank information is invalid or the account has been closed, the bank will return the payment to the IRS to be mailed by check at the address on file.
For more information on payments go to https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions#bank.
For additional information visit: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know.
For a FAQ, visit: https://www.irs.gov/coronavirus/economic-impact-payment-information-center.
Center for Independence of the Disabled
Assistance in determining eligibility and receiving benefits.