The Internal Revenue Service says it sent out millions of additional American Rescue Plan (ARP) payments to taxpayers in just a two-week period, pushing the total number of payments issued under the new law to just under 170 million.
The IRS teams with the Department of the Treasury and the Bureau of the Fiscal Service to send out the Economic Impact Payments (EIPs). The three agencies say some $395 billion has been distributed since the ARP payments started on March 12.
The effort, designed to keep the American economy going and recover through the course of the COVID-19 pandemic, has generated impressive numbers to date:
- In total, this latest round includes more than 2.3 million payments with a value of more than $4.2 billion.
- More than 900,000 payments, with a value of approximately $1.9 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.
- This also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. In the last two weeks, there were more than 1.1 million of these “plus-up” payments, with a value of more than $2.5 billion. In all, the IRS has made more than 8 million of these supplemental payments this year.
- Overall, the last two weeks of payments contain more than 1.2 million direct deposit payments (with a total value over $2.2 billion) with the remainder as paper check payments.
The IRS notes that more Economic Impact Payments are being sent out weekly. Payments continue to be sent to those who didn’t previously have information with the IRS, but recently filed a tax return, and to those who qualify for “plus-up” payments.
Filing opens the door to EIPs
For most Americans, getting an Economic Impact Payment was an automatic event; because they had filed an income tax return, the IRS had the information necessary to get an EIP to them quickly and accurately.
That said, there are a significant number of people who haven’t filed a tax return in years and so are “under the radar” to get any of the government payments they might otherwise qualify for.
By not connecting with the IRS, these individuals may be missing out on benefits such as the 2020 Recovery Rebate Credit, the Child Tax Credit or the Earned Income Tax Credit.
Filing a 2020 return – even if the filer traditionally doesn’t need to file – can help the IRS determine if the person is qualified for EIPs and other tax benefits and give the agency contact information to help get the payment to the filer.
This summer, the IRS will add another reason for non-filers to send in a return: advance payments of the 2021 Child Tax Credit will start to go out, based on information in a 2020 return.
Filing also gives the IRS information it needs to send out payments for a qualifying dependent.
Individuals who don’t get federal benefits and don’t have an obligation to file a tax return still need to file so they can qualify for Economic Impact Payments. This includes those who are experiencing homelessness and others.
Those who didn’t get one of the earlier Economic Impact Payments—or got less than the full amounts—could qualify for the 2020 Recovery Rebate Credit, but will have to file a 2020 tax return to get the credit.
Go to the special section on IRS.gov, Claiming the 2020 Recovery Rebate Credit if you aren’t required to file a tax return, for more information.
The qualifying income levels are different for EIP3
It should be noted that the top qualifying income levels have been changed for the third round of Economic Impact Payments. This means some people won’t qualify for the latest EIP even if they received one of the earlier payments or claimed the 2020 Recovery Rebate Credit.
Taxpayers making $75,000 or above in Adjusted Gross Income (or $150,000 for married couples filing jointly) will see their EIPs reduced. The phase-out is complete for taxpayers who make more than $80,000 ($160,000 for married filing jointly). Those who make more won’t qualify for the EIP.
More information on Economic Impact Payments is available on IRS.gov. The Get My Payment tool can show the status of payments.
Trussell Tax