How to Make Sure You Get Your Second Stimulus Payment

Photo to accompany story about new stimulus checks. Getty Images
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Your second stimulus check is on the way. Or is it? 

After the latest $900 billion stimulus relief package passed in late December, the countdown began for the IRS and Treasury Department to distribute $600 Economic Impact Payments to eligible Americans by Jan. 15, 2021. 

For many, the funds were pending in their bank accounts even before New Year’s Day and became available starting Jan. 4. So far, the IRS has reported sending $112 billion of the $164 billion estimated payments, according to the Wall Street Journal, accounting for more than two-thirds of the total money on its way to Americans. 

But plenty others are confused and uncertain about when or even if their payments are coming, including non-filers, those who have switched bank accounts, and taxpayers who use third-party services like H&R Block. Here are some common issues and how you can ensure you receive the full stimulus you’re eligible for: 

You Haven’t Received Your Second Stimulus Payment Yet

Many people will receive stimulus payments by direct deposit, according to the IRS. If you paid 2019 federal taxes via direct debit or received a tax refund by direct deposit, you will likely receive your second stimulus payment the same way. The majority of these payments have already been issued. If the IRS does not have your correct, up-to-date banking information, you’ll receive payment by mail or debit card (Electronic Impact Payment card, or EIP card).

Social Security or other beneficiaries who use Direct Express cards and received the first round of stimulus on that card can expect the same this time. Otherwise, payment will come by mail.

Generally, you can expect to receive your payment in the same form you received the first stimulus payment under the CARES Act in early 2020. But that’s not the case for everyone. If the IRS is unable to make a direct deposit, your payment may be sent by mail. And if your first stimulus payment arrived via paper check, you could receive a debit card this time, and vice versa. 

The best way to track how and when you’ll receive your stimulus payment is with the IRS’ Get My Payment tool. This tool can tell you when your payment was sent and whether it’ll arrive via direct deposit or mail.

And while Jan. 15 is the IRS’ deadline, you may not actually receive payment by that date. After your payment reports as mailed on the Get My Payment tracker, it may take up to three or four weeks to receive the check or debit card, the agency says.

“The mail is taking way longer than normal to get things out,” says Michele Cagan, CPA and author of “Debt 101.” “People who got direct deposit may already have it, but people who are getting checks or debit cards may not get them for weeks.” 

The IRS’ Get My Payment tool is a good place to start to find how you should expect payment and when your payment is sent. Still, the tool has only added to the uncertainty for some people, including those who get a message telling them payment status is unavailable. Others have faced difficulty even accessing the tool since it opened, as requests flood the system, Cagan says. 

You’re Not Sure About Eligibility

Payments being sent out this month are largely based on the most recent tax returns the IRS has available, for 2019. The amount you receive as an initial payment will be based on that data, though you may be eligible for more.

Eligible individuals with an adjusted gross income (AGI) under $75,000, heads of household under $112,500, and married couples filing jointly under $150,000 are eligible for the full $600 payment. After that, payments phase out with reduced payments up to $87,000 in income for individuals, $124,500 for heads of household, and $174,000 for married couples filing jointly. Children under 17 claimed on 2019 federal tax returns each qualify for an additional $600, while children 17 and older and adult dependents are not eligible.

Even if you don’t typically file tax returns, you can still receive your stimulus payment. It won’t be issued automatically, but you can get it in the form of the Recovery Rebate Credit when you file your 2020 taxes.

In fact, anyone who believes they didn’t receive the full payment for which they are eligible (whether this latest round of stimulus or the first one earlier last year) can reconcile the lost amount as a Recovery Rebate Credit on 2020 federal tax returns using Form 1040, the basic form most people will use when they file taxes.

You Might Not Get Your Payment By Jan. 15

Jan. 15 is the payment deadline, but you may not receive payment by this date or only receive a partial amount of what you believe you’re eligible for. 

Use the IRS’ Get My Payment tool to track the status of your payment. If you receive a Payment Status #2 — “Not Available” notice, you should prepare for a longer wait: your payment will likely not be processed by Jan. 15. 

Instead, you’ll need to claim the Recovery Rebate Credit on your 2020 tax returns. “If you end up owing money on your 2020 taxes, it will reduce the amount you owe,” Cagan says. “If you get a refund, you’ll get a bigger refund. If you have zero income, you’ll just get the full amount back.” 

There are several reasons why your payment may not arrive, but here are a few common issues:

You Used a Third-Party Tax Service

If you use a third-party servicer like H&R Block or TurboTax to file your tax returns, the IRS may have that company’s banking information on file rather than yours. If you don’t recognize the routing information on the Get My Payment tool and you filed using these services, that may delay your payment, even if you did receive the first stimulus via direct deposit. 

This issue has largely affected those who used a portion of their returns to pay fees or who received a refund advance from the servicer, says Kelly Phillips Erb, tax attorney and managing shareholder at The Erb Law Firm, PC, and founder of Taxgirl.com. You will still receive your stimulus payment from the servicer in the same form you received your tax refund last year, it may just be delayed. Erb expects a delay of about two weeks.

You’ve Switched Banks

If the bank account on file with the IRS is inactive, you won’t be able to update it. “They can’t change it once it’s in the system,” Erb says. “If the IRS can’t send it to you via direct deposit, they are going to send a paper check, it’s just going to take a little bit longer.”

In the case of a closed account, the financial institution is required to return the payment to the IRS. This can also happen if your bank has changed its information in the past year, like taking on a new name or merging with another financial institution, Erb says. 

If your direct payment does bounce back and you’re not issued a mailed check or debit card by Jan. 15, the IRS says you should claim the Recovery Rebate Credit on your 2020 tax return to receive your payment. The IRS hasn’t yet given exact clarification on whether it will issue paper checks or automatically recommend claiming the credit in this case, Cagan says. Experts say the best thing you can do is keep checking the IRS Get My Payment tool for updates.

Your Financial Situation Changed from 2019 to 2020

Any changes to your financial situation in 2020 may affect your payment amount and receipt.

For most people, this will result from job or income loss due to the pandemic. If your income was higher than the phaseout thresholds in 2019, but your hours were cut or you only worked for part of 2020, you can claim the stimulus money you didn’t receive using the Recovery Rebate Credit on your 2020 tax return.

If you had a baby in 2020, got married or divorced, you were previously claimed as a dependent, or you have a child who aged out of being claimed as a dependent, you may receive more after claiming the credit as well.

When you’re ready to file 2020 federal taxes, an accountant or tax filing service may be helpful to clarify your exact eligibility. If you file on your own, your Form 1040 will include a Recovery Rebate Credit worksheet to help you determine the total amount you’re eligible for.  

More Common Questions

What If I Accidentally Claim Two Payments?  

The IRS will begin accepting and processing returns for 2020 taxes on Feb. 12, 2021.

Because of the quick turnaround for stimulus payments, the IRS is still working on revisions to Form 1040 and other documents to account for the second stimulus, says Eric Bronnenkant, head of tax at Betterment. By the time tax season officially begins, most people should receive their payment or notice (via Get My Payment) that it’s been mailed.

Before filing, if you still haven’t received payment, continue to monitor the Get My Payment tool. You may initially see an error, but you can keep checking the tool once per day. If your status changes to Payment Status #2 — “Not Available” you will not receive the second payment and will need to file for the Recover Rebate Credit on your 2020 tax return.

“I’m sure there’s going to be some confusion for someone who thinks they didn’t get the money and then tries to claim the credit when they file their taxes,” Bronnenkant says. “I have a feeling there’s going to be some friction when people file their 2020 taxes between what the IRS thinks happened and what actually happened.”

But Erb says there will likely be checks in place to ensure payments are sent twice. The Recovery Rebate Credit is designed to reconcile what the IRS says you were issued and what you received.

“In a situation where it’s just a timing issue, you’re going to be able to make the reconciliation, but if it shows up on the IRS system that the check is in the mail, I don’t think the IRS is going to send it twice.”

Before you file, stay up to date with your latest status using the Get My Payment tool, so you don’t claim a payment that’s been issued already.

Are Stimulus Payments Taxable?

No, none of the Economic Impact Payments you receive are taxable or counted as income. “They’re technically an advanced credit against your 2020 taxes,” Erb says. 

Will Claiming the Recovery Rebate Credit Increase My Taxes?

No, your taxes won’t increase due to reconciliation. “There’s a lot of fear,” Erb says. “Reconciling the credit on your 1040 is not a bad thing, it’s not a trap, it’s not intended to trick you into paying more money.”

The Recovery Rebate Credit is designed to reconcile the money you are eligible for versus what you actually received. Claiming it will only increase the amount of your tax refund or reduce the amount you owe on your 2020 federal taxes. 

Do I Have to Return Money I Received But Don’t Qualify For?

“If you got more money than you should have — if your income went up in 2020 and you wouldn’t have qualified based on your 2020 income, for example — then you don’t owe any money back because of that,” Bronnenkant says. 

Another scenario, Erb says, could be those who receive payment for a dependent child who turned 17 in 2020, aging out of eligibility. But again, you don’t need to repay the money received in that case. “If it turns out that you got more than you ‘deserved,’ then you don’t have to pay it back,” she says.

Bottom Line

Given the quick turnaround time for this round of stimulus payments and the overlap with the upcoming federal tax season, there’s bound to be some confusion and delays. “Unfortunately, if you don’t get your money through the Jan. 15 run, even if you did everything right, you may just have to wait until you file,” Bronnenkant says. 

Continue monitoring your payment using the IRS’ Get My Payment tool and keep an eye on your mail for either a paper check or EIP debit card. When it’s time to file your tax return and you haven’t been issued payment or you only received partial payment, make sure you claim the Recovery Rebate Credit for the missing amount. 

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