You've probably heard a lot over this past year about the economic impact payments that were paid out in 2020 as a result of the coronavirus emergency. These were also sometimes referred to as economic stimulus payments. These payments were based on a tax credit, called the Recovery Rebate Credit, that taxpayers were to receive after filing their 2020 federal income tax returns. However, the CARES Act included an advance payment of the credit during 2020, instead of making people wait until they file their returns in 2021. The goal was to put money in taxpayer's pockets quickly, rather than making them wait for the normal tax refund cycle. (You may remember something like this happening back in 2008 when the economy took a severe downturn, and the government disbursed stimulus payments at that time.) The first round of economic impact payments, issued between April and June 2020, was $1,200 for the taxpayer ($2,400 if married filing jointly in 2020), plus $500 per qualifying child. The second round of payments, issued in December 2020 and January 2021, was $600 per person.
Reasons Why You May Not Have Gotten a Coronavirus Economic Impact Payment
If you haven’t received your payment and are wondering what to do next, let’s start by talking about why you may not have received a payment.
There are several reasons why a taxpayer may not have received the advance payment. The payment eligibility was determined by the IRS based on your reported 2019 adjusted gross income, which was Line 8b on your 2019 Form 1040. This is the first place to look to see if you qualify (if you had not filed your 2019 tax return by the end of March 2020, however, you may want to look at your 2018 Form 1040, line 7). Depending on your filing status, did you have too much income to qualify? Payments were eliminated for the first economic impact payment if your income was over the following amounts:
- $198,000 for married filing joint returns, plus an additional $10,000 for each qualifying child;
- $136,500 for head of household filers, plus an additional $10,000 for each qualifying child;
- $99,000 for single or married filing separately filers, plus an additional $10,000 for each qualifying child.
For example, if you file jointly with your spouse and you have two children under the age of 17, your actual income limit is $218,000 before you would receive nothing.
If your income was below these levels, you may have received a reduced economic impact payment because the payments started to phase out at other income levels. The payment was reduced $5 for every $100 your income went over the following amounts:
- $150,000 for a married filing joint return;
- $112,500 for head of household; and
- $75,000 for single or married filing separately.
Since the second round of economic impact payments were half the amount of the first, the income limitations are reached much sooner, so more taxpayers will not qualify for a second payment if they received a reduced first payment. There is no income requirement or filing requirement to receive either the first or second payment. So, if your income was all nontaxable (for example, your only source of income was from Social Security benefits), you should have received full payment of both advance credits.
There are other reasons, besides your income, why you may not have received the payment, such as:
- Not having a valid social security number (SSN): In the original CARES Act, both the taxpayer and spouse had to have a valid SSN to receive a payment unless the spouse or taxpayer was in the military. For the second round of payments, the SSN requirement changed and only one spouse was required to have a valid SSN, but only the spouse with the valid SSN will receive a payment if they otherwise qualify. The spouse that does not have a valid SSN will not receive a payment. This change is retroactive to the first round of payments. Taxpayers who did not qualify for the first round of payments due to their spouse not having a valid SSN will be able to claim the credit when they file their 2020 tax return.
- Being claimed as a dependent by someone else: If you are being claimed as a dependent by someone else, then you will not qualify for a payment regardless of your income. The most common situations are a child aged 17 or older being claimed by their parents, or a parent being claimed as a dependent by a child who is supporting them.
- Nonresident aliens: If your immigration status is as a nonresident alien, you do not qualify for a payment.
- Are you delinquent on child support payments? While the IRS is generally not offsetting the economic impact payments for other liabilities you may owe, such as back taxes or delinquent student loans, they are seizing the payments if there is a levy on your federal tax refunds for unpaid child support.
If you are a U.S. citizen and are living outside of the United States, you still qualify for a payment so long as you have a valid social security number.
Check to See if the IRS Tried to Pay You a Coronavirus Economic Impact Payment
Still confused? The easiest way to see if the IRS actually tried to pay you is to visit the IRS website here:
https://www.irs.gov/coronavirus/get-my-payment. You will need to enter your social security number, date of birth, your street address, and zip code. If you have moved since you last filed a return, enter the address where you filed your most recent tax return. If the IRS did pay you, you will see information regarding when and how the payment was sent (either by direct bank deposit or a mailed check or debit card). If no payment was sent, it will likely display "payment status not available." The IRS also sent out Notice 1444 with the first payment and Notice 1444-B with the second payment, but many taxpayers either did not receive or did not retain these notices.
How You Can Still Receive the Payment
If you look at all these requirements, did not receive a payment, and still believe you should have received your payment, don't despair! You can still receive the payment, but you will need to file your 2020 federal income tax return to do so. As we stated at the beginning, these payments were an advance payment for a credit you can claim on your 2020 tax return – so if you did not receive the advance payment, you can claim it on your return when you file. It is important to know how much you received in advance so your return can be prepared accurately. If your income was too high to receive a payment based on your 2019 return, that does not mean you can't receive one based on your 2020 income. With many taxpayers becoming unemployed or working reduced hours in 2020, you may still qualify for a payment if you saw a reduction in your income. All the commercial software tax preparation products will be able to calculate the correct amount you are due, and it will be treated similarly to withholding for purposes of your refund or balance due. If your tax liability is lower than your combined withholding, other payments and credits, and the Recovery Rebate Credit, then the IRS will send you the overpaid amount. Even taxpayers who received a payment will need to enter this information to determine if they should have received a higher payment. There is no repayment required for anyone who received too much money, unless it was received for a person who died prior to 2020.
In short, just because you did not receive the payment as an advance doesn't mean that you are not entitled to one. There are many reasons you may not have received the payment. But all is not lost; you can claim the Recovery Rebate Credit on your 2020 federal income tax return. Just know that you won’t be able to file your return until February 12, 2021!