Coronavirus (COVID-19) stimulus rebate payments to individuals

Find out the latest information on the 2020 coronavirus stimulus payment (rebate) paid as an advance credit to eligible individuals.

January 15, 2021

Editor's note: This page will be updated as new information is available. Last updated January 14, 2021.

The following is a collection of TAX in the News articles based on H.R. 748, Coronavirus Aid, Relief, and Economic Security Act, or CARES Act signed into law on March 27, 2020. The CARES Act authorized the first economic impact payment (EIP) or stimulus payment to individuals.

For more information on EIP 2 or second stimulus payment, see the Insights article "Top 10 tax provisions for 2020"

Catch-up EIPs and Balance Due Notices Paused (Originally published in the September 2, 2020 edition of TAX in the News)

Catch-up EIPs for injured spouses

Under the CARES Act an economic impact payment (EIP) for an otherwise eligible individual may be offset to pay past due child support. For joint filers, although the offset applies only to the spouse who owes child support, in many instances the entire EIP was diverted to pay the one spouse’s back support.

In early to mid-September, the IRS will mail EIPs to about 50,000 eligible spouses who do not owe this debt and who submitted Form 8379, Injured Spouse Allocation with their 2019 or 2018 tax return. These spouses do not need to take any action; the IRS will automatically mail a check for their portion of the EIP that was applied to the other spouse’s debt.

Although no timeframe is yet available, the IRS will also automatically issue checks to spouses whose EIPs were offset by the other spouse’s debt but who did not previously file an injured spouse claim. These spouses do not need to submit Form 8379 or take any other action. See IRS news release IR-2020-192.

Some balance due notices temporarily stopped

The IRS has temporarily stopped mailing three balance due notices: CP501, CP503, and CP504.

These are follow-up notices usually sent automatically to taxpayers who do not respond to their original balance due notice, CP14. Because of delays in processing correspondence, taxpayers may have sent in checks that are still in the IRS’s unopened mail backlog. See the IRS’s August 21 statement on balance due notices.

Note that some taxpayers may have received follow-up notices sent earlier. No action is needed if the taxpayer already responded to the CP14. Taxpayers who have not yet paid the balance due or responded to the notice should do so as soon as possible.

Economic impact payment (EIP) deadlines for non-filer tool

Taxpayers who are NRTF may still request an EIP, or an additional EIP this year, but face some upcoming deadlines as explained in IRS news release IR-2020-180. The news release also mentions that the IRS is working to resolve cases and issue EIPs to spouses of taxpayers who owe child support and spouses of deceased taxpayers.

Federal benefit recipients with qualifying children must act by September 30 to receive an additional EIP this year.

RRB, social security, SSI, or VA beneficiaries who are NRTF and haven’t already used the Non-Filers tool to provide information on their qualifying children may use the tool to do so by September 30, 2020. The IRS will send an additional $500 per qualifying child. Those who received their original EIP by direct deposit will receive the additional EIP by direct deposit as well. Others will receive a check. Beneficiaries who miss the September 30 deadline can still receive their additional EIP by filing a 2020 tax return next year.

Others who are NRTF must act by October 15 to receive an EIP this year.

Other individuals who are NRTF, do not receive federal benefits, and have not yet received an EIP must take one of the following actions by October 15 to receive an EIP this year:

  • Use the Non-filers tool.
  • File a simplified return per IRS procedures (see FAQ 61 in the “Non-filers tool” section of IRS’s EIP Information Center).
  • File a regular tax return. Individuals who are eligible for EIC or other tax benefits must file a regular tax return to receive these benefits.

In any case, whether NRTF individuals use the tool, file a simplified return, or file a regular return, they must take action by October 15 or wait until next year to file a 2020 return to get an EIP.

EIP updates: additional EIPs for qualifying children and EIPs for 2019 returns (Originally published in the August 19, 2020 edition of TAX in the News)

Non-filers with qualifying children may get an additional $500. The IRS will issue additional EIPs to taxpayers who used the IRS’s Non-Filers tool before May 17, 2020 and claimed at least one qualifying child. Because of a programming error that was corrected on May 17, these users did not receive the $500 per qualifying child portion of their EIP. The additional amount was or will be issued automatically. Direct deposit payments were scheduled for August 5 and mailing of paper checks was scheduled for August 7. Those who used the tool on or after May 17, 2020, should receive the correct EIP. See the Non-Filers tool statement.

Continued EIP processing for 2019 returns. New FAQs posted to IRS’s site indicate that if a taxpayer is determined to be eligible for an EIP based on 2019 tax return information, and has not either received an EIP or determined to be ineligible based on 2018 tax return information, then the taxpayer will receive an EIP based on 2019 tax return information. The taxpayer should use the Get My Payment tool to check the status of the EIP.

If a taxpayer was determined to be ineligible based on 2018 tax return information, the taxpayer will not receive an EIP in 2020. Also, the IRS will not issue any additional EIP this year if the taxpayer received an EIP based on 2018 information and is eligible for a higher EIP based on 2019 information. These taxpayers will be able to claim their EIP or additional EIP when they file their 2020 tax returns in the 2021 filing season. See EIP FAQs in the “Requesting My Economic Impact Payment” section.

Duplicate EIPs to unmarried parents do not have to be returned (Originally published in the June 3, 2020 edition of TAX in the News)

In addition to FAQs, the IRS periodically adds “tax tips” on COVID-19 and other topics on which it continues to hear questions.

In COVID Tax Tip 2020-62 the IRS describes a situation in which unmarried parents receive the additional $500 EIP for the same child. This could happen, for instance, if one parent claimed the child in 2018 and has not yet filed in 2019 while the other parent filed in 2019 and claimed the child.

The tax tip states that the law doesn’t require either parent to return the EIP. Each parent should retain Notice 1444, Your Economic Impact Payment, which was sent to the parents’ last known addresses within 15 days of the EIP.

Returning economic impact payments (EIPs) sent to certain individuals (Originally published in the May 13, 2020 edition of TAX in the News)

The IRS has posted new FAQs regarding EIPs sent to certain individuals.

  • FAQ 10: EIPs to someone who has died. The survivors of a person who died before receipt of the payment should return the entire payment. A surviving spouse should return the portion of the payment made on account of the decedent (generally, $1,200).
  • FAQ 11: EIPs to nonresident aliens. A person who is a nonresident alien in 2020 is not eligible for the payment. A qualifying resident, that is, an individual who meets the substantial presence or green card test, is likely eligible for the payment.
    • Note: in some circumstances an individual may be a qualifying resident in 2020 based on various elections or treaty benefits. Examples include the first-year choice and a nonresident alien spouse treated as a resident alien.
    • The FAQ has links to information about residency status. In any case, a qualifying resident for the EIP must have an SSN and may not be a dependent. Ineligible aliens should return the EIP.
  • FAQ 12: EIPs to someone who is incarcerated. A person who is incarcerated should return the payment. For joint filers, the spouse who is not incarcerated should return the incarcerated spouse’s portion of the payment (generally, $1,200). “Incarcerated” for this purpose generally means the individual is confined in a correctional facility because of a criminal offense.
  • FAQ 41: how to return EIPs. This FAQ explains how to return EIPs, including paper checks, direct deposits, checks that have been cashed, or a decedent’s portion of a joint EIP. Mailing addresses are based on where the individual making the payment lives.

EIP information center FAQs

Last day to enter direct deposit information in the Get My Payment tool (Originally published in the May 13, 2020 edition of TAX in the News)

The last chance to enter direct deposit information in the Get My Payment tool ends Wednesday, May 13, at noon ET. Starting in the second half of May the IRS will accelerate payment of EIPs by paper check. Taxpayers who are not required to file (NRTFs) may still use the non-filers tool to enter simple return and direct deposit information by October 15. Reminder: individuals with a filing obligation should not use the NRTF tool to enter bank information.

IRS news release IR-2020-92

Economic impact payments (EIPs) (CARES Act) schedule (Originally published in the April 15, 2020 edition of TAX in the News)

Automatic payment of EIPs to individuals who chose direct deposit for their 2019 or 2018 refund started the week of April 11. In general, the first wave of payments was sent to eligible individuals who filed a tax return in 2018 and/or 2019 and requested a direct deposit refund.

Social Security and Railroad Retirement beneficiaries who are NRTF will automatically receive an EIP soon. The payments will be made the same way beneficiaries normally receive their benefits, i.e. by direct deposit or check.

Individuals who receive supplemental security income (SSI) or compensation and pension (C&P) benefits from the Department of Veterans Affairs and who are NRTF have until May 5 to enter information about qualifying children under 17 in the non-filer tool. The IRS will start sending EIPs to this group in mid-May. Those who miss the cut-off to add dependents will receive a $1,200 EIP but will have to wait to file a 2020 tax return for the additional $500 per dependent payment.

A new “Get My Payment” tool is now available where individuals can check the status of their EIPs and provide bank account information in certain situations if an EIP check is not already scheduled for release.

The Get My Payment landing page has a link to extensive frequently asked questions that cover eligibility, accessing the tool, checking payment status, banking information, “locked” status and other error messages, and mailing address issues.

See IR-2020-61 for more information.

Non-filers: enter payment info here tool (Originally published in the April 15, 2020 edition of TAX in the News)

The IRS has launched a new “Non-Filers: Enter Payment Info Here” tool to accommodate individuals who are NRTF. Individuals in this category may include:

  • Lower-income taxpayers who did not file a tax return in 2018 and 2019 with income less than $12,200 ($24,400 for married couples) for 2019.
  • Students who are not and cannot be claimed as dependents.

Individuals are asked to provide basic information including SSN, name, address, and dependents under 17. Individuals can also enter bank account information if they’d like to receive their EIP through direct deposit instead of waiting for a check. The tool will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send an EIP.

The IRS encourages individuals who are NRTF to use the Non-Filers: Enter Payment Here tool in order to receive an EIP. However, there may be circumstances in which NRTF individuals prefer to submit a tax return, for example, to be able to e-file a federal and state return at the same time. Rev. Proc. 2020-28 provides simplified return procedures for these individuals.

Those who file Form 1040 or Form 1040-SR electronically must enter $1.00 on lines 2b, 7b, and 8b (taxable interest, total income, and AGI, respectively), the applicable standard deduction on line 9, and $0.00 on line 11b (taxable income). These entries are the same for who have a small amount of income but are under the filing requirement for their filing status, and those who have no income. In either case, the IRS will not challenge the accuracy of the return.

Returns filed using simplified procedures should be filed no later than October 15, 2020.

See Rev. Proc. 2020-28 for more information.

Automatic Economic Impact Payments

At this point, NRTF individuals who will get automatic EIPs now include those who receive:

  • Social security benefits
  • Railroad retirement benefits
  • Supplemental security income (SSI)
  • Veterans compensation and pension (C&P) benefits

Anyone in this category who also has a qualifying child under 17 may use the non-filers tool to receive the additional $500 per child EIP. Once the payments are scheduled, non-filers will not be able to get the $500 payment for a child until they file a 2020 tax return next season in 2021.

Note that for an NRTF couple, if one spouse receives benefits but the other spouse does not, only the spouse with the SSA-1099 or RRB-1099 will get an automatic $1,200 payment. The other spouse may need to file a simple return to obtain his or her $1,200 payment. We anticipate the IRS will issue further guidance on the simple return process soon, including best practices for married couples in this situation.

Banking information clarification (originally published in the April 8, 2020 edition of TAX in the News)

Clarification on dependents. An individual who did not file in 2018 or 2019 and was claimed or could be claimed as a dependent is not eligible for the economic impact payment (aka stimulus payment or recovery rebate).

Example: In 2019 Mathilda, age 21, lived with her parents. She was not a student and earned about $2,000 from temporary jobs. Her situation was the same in 2018. Although they provided most of her support, her parents did not claim her as a dependent in 2018 or 2019 and Mathilda didn’t file a return either year.

She is not eligible for a payment because her parents could have claimed her as a dependent.

To continue with the example, if the parents had claimed Mathilda as dependent, they could not claim a qualifying child stimulus payment for Mathilda because only children under age 17 can qualify.

Banking information clarification: Taxpayers who paid an IRS balance due through a direct debit will still need to use the IRS “Get My Payment” tool to input their bank authorization for the economic impact payment. Otherwise, the IRS will issue a check.

See the following IRS resources for more information:

2020 recovery rebates amount for individuals

H&R Block has a stimulus payment calculator to determine how much an individual should receive.

The credit is equal to:

  • $1,200 ($2,400 if MFJ), plus
  • $500 per qualifying child for child tax credit purposes

The credit phases out if AGI exceeds:

  • $150,000 (MFJ)
  • $112,500 (HOH)
  • $75,000 (single, QW, MFS)

Note: The credit is reduced by 5% of the taxpayer’s AGI that exceeds the phaseout threshold.

“Children” ages 17 and older do not qualify the taxpayer for a $500 payment. Children in this situation who are dependents of the taxpayer also do not qualify for their own $1,200 payment.

The advance credit may be offset for past-due child support, but cannot be offset for debts to federal agencies, state income tax, or unemployment compensation.

Recovery credit eligibility

All individuals are eligible for the credit, except:

  • Nonresident aliens (for tax purposes)
  • Anyone who could be claimed as a dependent by another taxpayer
  • An estate or trust
  • Those that don’t have an SSN or ATIN (adoption TIN); however, there is an exception for members of the Armed Forces if at least one spouse has an SSN

How the credit works

The credit will be paid as an advance, refundable credit for the 2020 tax return. The Treasury is issuing advance credits to individuals who are eligible individuals based on their 2019 tax return.

The advance credit amount is based on 2019 income and household composition.

  • If the 2019 return hasn’t been filed yet, the advance may be based on the 2018 return.
  • The payment amount for Social security and railroad retirement beneficiaries who haven’t filed 2018 or 2019, according to the Treasury press release, is determined using information provided by the Social Security Administration (SSA) or Railroad Retirement Board (RRB) based on Form SSA-1099 or Form-RRB-1099.

On the 2020 tax return, the recovery credit calculated for 2020 is reduced by the advance payment previously received. Taxpayers won’t be required to repay any overpayment of the stimulus paid to them on their 2020 return. These payments are also nontaxable.

COVID-19 Scam alert (Originally published in the April 8, 2020 edition of TAX in the News)

The IRS has issued a warning about COVID-19 related scams, especially for schemes connected to economic impact payments. There is particular concern about stepped-up calls, e-mail phishing, and contacts through social media about “stimulus checks” where the scammer typically tries to trick the victim into supplying personal information. The IRS will never contact individuals for banking or other information through these channels.

For more information, see IRS news release IR-2020-64

Other information to be provided

No later than 15 days after distributing the payment, the IRS must mail a notice to the taxpayer’s last known address indicating how the payment was made, the amount of the payment, and a phone number for reporting any failure to receive the payment to IRS.

Individuals will need to contact the IRS if they have an issue with the payment. The advance credit may be offset for past-due child support, but cannot be offset for debts to federal agencies, state income tax, or unemployment compensation. If a taxpayer gets a notice that they should have received a payment but did not, they will need to contact the IRS.

A public awareness campaign will be conducted by the Treasury, the Social Security Administration, and other public agencies, and will include information for taxpayers who have not filed in 2018 or 2019.

Funds for the credit are being appropriated to Treasury (Bureau of Fiscal Service and IRS) and the Social Security Administration to support implementation and enforcement.

For more information on coronavirus tax relief, see "Coronavirus COVID-19 tax relief resources" and Individual tax changes in the CARES Act.

Acronyms

  • CARES Act – the Coronavirus Aid, Relief, and Economic Security Act
  • EIDL – Economic Injury Disaster Loan
  • EIP – Economic impact payment, aka stimulus payment
  • FFCRA – the Families First Coronavirus Response Act
  • NRTF – not required to file
  • PPP – Paycheck Protection Program
  • QIP – qualified improvement property
  • TCJA – Tax Cuts and Jobs Act
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