Stimulus checks (also known as Economic Impact Payments or EIP) were prepaid 2020 tax credits intended to stimulate the economy by providing consumers with money to spend during a time of economic uncertainty. The full amount of the first EIP is $1,200 for single, or $2,400 if married filing jointly, plus $500 for each child under the age of 17. The second round was reduced to $600 per eligible taxpayer. Taxpayers do not need to worry, as this money will not be considered taxable income. There were phase-outs for single filers with income over $99,000 and joint filers with no children earning above $198,000, as well as no eligibility for people without valid social security number or permanently incarcerated citizens.
Taxpayers can check the amounts of their first and second payments online at irs.gov by clicking on “View Your Account”. Individuals can set up a login to view received payments for the EIP, plus items such as tax transcripts and other IRS account information. Notice 1444 letters will also be mailed by IRS to every US taxpayer showing the amounts paid out. When received, please send with all other tax documents to your accountant.
Another way to check on the EIP payment status would be by clicking “Get My Economic Impact Payment”. After entering personal information to verify your identity, the IRS will provide information regarding direct deposit to a bank account, paper check, or EIP debit card sent to the address on file. If there is a message “Payment Status Not Available,” then the eligibility is not determined for a payment. Please note this method will not show the amount of the EIP provided.
If an eligible individual did not file 2018 and 2019 taxes, register to IRS by October 15, or receive the stimulus check, there is still a way to claim the stimulus money by filing their 2020 tax return. The new Recovery Rebate Credit can lower taxes owed and even may result in a refund up to the maximum EIP value. It is also important to note the Recovery Rebate Credit amount will reduce the amount of stimulus payments received, however, no money will be due back.
If you want more information on EIPs or need help with tax preparation, contact our tax professionals at The Innovative CPA Group at 203-489-0612. Or contact us online.