Some US residents will begin 2021 with money in the bank. The Internal Revenue Service Tuesday night reported a second round of Economic Impact Payments are already going out to taxpayers across the country.
Authorized by the newly enacted Coronavirus Response and Relief Supplemental Appropriations Act as part of the Consolidated Appropriations Act of 2021, the second round of payments or “EIP 2,” is generally $600 for singles and $1,200 for married couples filing a joint return. Those with qualifying children will also receive $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment.
“This bipartisan legislation will provide another round of Economic Impact Payments to eligible individuals and families, renew the Paycheck Protection Program to support small businesses and their employees, ensure needed access to unemployment benefits for Americans who have lost their jobs due to COVID-19, and provide additional funding for schools, vaccine distribution, and other important sectors of the economy,” said Secretary Steven T. Mnuchin, US Department of the Treasury.
“We are fully committed to ensuring that hardworking Americans get this vital support as quickly as possible and to further strengthening our economic recovery”
US Department of the Treasury
“Throughout this challenging year, the IRS has worked around the clock to provide Economic Impact Payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig. “We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.”
Some may have received notification as early as Dec. 29 that the initial direct deposit payments, part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. The direct deposit payments will continue to be issued this week and the first paper checks were slated to go in the mail today, Dec. 30.
Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021.
IRS Commissioner Chuck Rettig (Photo: www.irs.gov)As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.
Those who received the first round of payments earlier this year but didn’t receive a payment via direct deposit will receive a check or, in some instances, a debit card. These payments will conclude in January.
Under the earlier CARES Act, joint returns of couples where only one member of the couple had a Social Security number were generally ineligible for a payment – unless they were a member of the military. But this month’s new law changes and expands that provision, and more people are now eligible. These families will now be eligible to receive payments for the taxpayers and qualifying children of the family who have work-eligible SSNs.
Eligible individuals who did not receive an Economic Impact Payment earlier this year will be able to claim it when they file their 2020 taxes in 2021. Taxpayers who didn’t receive a payment this year should review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it.
The Economic Impact Payments are advance payments of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR. According to the IRS, the Economic Impact Payment is not taxable for federal income tax purposes, but will reduce any Recovery Rebate Credit that can be claimed on 2020 Form 1040 or 1040-SR.
People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish a IRS.gov/GetMyPayment in a few days.
Recipients will receive an IRS notice, or letter, after they receive a payment telling them the amount of their payment. They should keep this for their tax records.
For more information about Economic Impact Payments and the 2020 Recovery Rebate, visit IRS.gov/eip.
