*Last updated on Jan. 10, 2021.*
IMPORTANT UPDATES ON THE SECOND STIMULUS PAYMENT
Latest update on Jan. 10 at 9:30pm CST
TaxAct President, Curtis Campbell, shares a message on the timing of the second stimulus payments
Get answers to common questions regarding the IRS error with the second stimulus payments by visiting Second Stimulus Payment Frequently Asked Questions.
Update on Jan. 10, 2021 2:45pm CST
In conclusion of our meeting with the IRS today, we can confirm the IRS has agreed to directly reprocess the stimulus funds to the correct bank accounts of those impacted by the stimulus payment error.
The IRS stated customers should begin to see payments starting Feb. 1.
We are deeply disappointed that the IRS did not agree to the solutions we offered that would have likely delivered these funds as early as next week. Unfortunately, they chose their own path that does not as quickly help the people most affected by the pandemic.
We know many of our customers need and expect these payments from the government and understand the difficulties this has created. We will continue to do everything we can to support our customers and continue to press every point within the government until these payments are received.
Update on Jan. 8, 2021 7:30pm CST
*** The processing of stimulus payments for our impacted customers will start next week provided the IRS releases the funds to our financial partner early in the week. ***
We have made significant progress in our efforts to resolve the stimulus issue with the IRS. We had multiple meetings with the IRS today and have actively engaged with a number of leaders in the Federal Government to get you your funds as quickly as possible. We confirmed the IRS has the stimulus payment funds in their possession and are working through their process to return them for distribution.
*** The processing of your stimulus payment will start next week provided that the IRS releases the funds to our financial partner early in the week. ***
Our bank partner is fully prepared to have these funds deposited in the appropriate customer accounts quickly, once the money has been received.
We will meet again with the IRS on Saturday and will provide updates throughout the weekend as new information becomes available.
Update on Jan. 8, 2021 at 11:30am CST
We have demanded the IRS immediately send our customers’ stimulus funds back to our banking partner so that we can get the payments distributed to you as quickly as possible. This IRS mistake has affected the entire industry, and we have a large team working tirelessly to resolve the error that has resulted in the delay of delivering stimulus funds to many Americans.
We will post another update on timing of the payment later today, but we want to make clear exactly what happened.
- The IRS sent some of the stimulus payments to inactive or closed bank accounts. This IRS error caused some people to not receive their stimulus payment.
- Upon realization of this error, the IRS instructed financial institutions to return the funds to them, which is required by law, and stated they would reprocess those funds to the recipients.
- Our bank partner complied immediately to ensure we were serving our customers’ needs and helping the IRS get the funds to our customers as quickly as possible, in many cases ahead of others in the industry.
- The IRS then changed course again, stating they would not reprocess the funds and individuals impacted by this error needed to claim the stimulus on their tax return to receive their money. They also stated any financial institutions who had not yet returned the money could distribute the funds directly.
- We have demanded that the IRS immediately send our customers’ stimulus funds back to our banking partner so we can get the payments distributed to the right accounts as fast as possible.
- We have a plan in place with our financial partner to distribute those funds within days of receiving them from the IRS.
- We are actively working with the IRS on immediate solutions that will allow us to process funds on an expedited basis.
We know this is a difficult and frustrating time for everyone. We want to assure you we have every resource focused on helping resolve this as fast as possible.
Second Stimulus Payment FAQs
You heard right – a second stimulus payout is on the way. Late on Dec. 27, President Trump signed the massive COVID-19 relief and government spending bill, which includes a second round of stimulus payments to eligible individuals across the country.
To help bring you quickly up to speed, here’s a basic breakdown of the payments.
The important details you want to know
- The second round of stimulus payments are based on the information reported on your 2019 tax return.
- Currently, the second stimulus payout is as follows for those eligible:
- $600 per individual
- $1,200 per couple
- $600 per child under the age of 17
*Another COVID-19 relief bill with additional stimulus money is being discussed by Congress but has yet to be passed. Continue to check back here for the most up-to-date information.
- Income qualifications for receiving the second payment are similar to the first round. You will receive the full amount if you are:
- An individual earning less than $75,000 per year
- A couple earning less than $150,000 per year as a couple
If your Adjusted Gross Income (AGI) is more than those amounts, your stimulus payment will be reduced by $5 for each $100 over the limit. It completely phases out if:
- You earn more than $99,000 as a single taxpayer
- You earn more than $136,500 as Head of Household
- You earn more than $198,000 as joint filers with no kids
ProTip: Your AGI includes income like wages, salaries, or interest minus adjustments for specific deductions like student loan interest or retirement contributions. Check line 8b of your 2019 Form 1040 to locate your AGI.
The answers to even more commonly asked questions
How does the stimulus payment impact my tax return again?
The stimulus payment is an advance on a tax credit for your 2020 federal tax return. Since 2020 returns are not yet filed, the IRS uses your 2019 return to determine how much money you qualify to receive.
You may get additional money once you file your 2020 return if your situation is different than what was reported on your 2019 return.
For an additional explanation on how the stimulus payments work, check out the blog post Everything You Need to Know About the First Stimulus Payments.
Is this payment taxable?
No. Like the first stimulus payment, the legislation in this bill states the payment is not taxable. It is an advance on a tax credit associated with your 2020 tax return.
What’s the difference between the stimulus payment, Economic Impact Payment, and the Recovery Rebate?
Nothing. They all mean the same thing. The IRS changed the way they referenced the payments a few times throughout 2020, creating multiple names for the same payment.
When will I receive my money?
Language in the bill states the money must be sent to recipients by Jan. 15, 2021. The IRS has started issuing payments. If you’re receiving the payment via direct deposit, it may take several days for the money to post to your bank account.
Paper checks and debit cards are also being processed. The IRS started issuing those as well and will continue doing so throughout January. Carefully check your mail so you do not miss it.
How do I check the status of my payment?
You can use the IRS’ Get My Payment tool to check the status of your payment.
What if I don’t have a bank account for direct deposit?
If you are eligible to receive a stimulus payment, not having a bank account won’t stop you from receiving your money. The IRS is issuing checks and debit cards as well, and the process to issue those has already started. Mailed payments will take longer to reach their recipients, however.
Can I change my direct deposit information?
Unfortunately, the ability to update your bank account information using the IRS’ Get My Payment tool is unavailable. That means you’ll receive the money in the most recent bank account the IRS has on file for you.
If the account the IRS has on file is closed, you will need to claim the Recovery Rebate Credit on your 2020 tax return to receive your stimulus payment. The money will then come to you as a tax refund. The TaxAct product is up to date with this information and can help you claim the credit to ensure you’re getting the right amount of money you deserve.
Will I get my second stimulus payment on the debit card I previously received?
No. The IRS is not reloading money to the cards issued with the first stimulus payment. If you are set to receive a card again, you’ll receive a new one.
What if my circumstances changed since the first stimulus payment?
When you file your 2020 tax return, you can indicate changes to your income, filing status, or dependent information. That information will help determine how much you qualify to receive in a stimulus payment. Therefore, if you are eligible for more than you initially receive, the information reported on your return will influence whether you receive additional funds.
Fortunately, TaxAct makes that process easy by asking questions to quickly gather the information needed to accurately calculate the amount of money you are eligible to receive. The product will let you know if you are owed more or if you received the right amount.
I haven’t received my payment. Why is it taking so long to process?
Rest assured, if you are eligible to receive a second stimulus, you will receive your money. Most individuals do not need to do anything to get it. Contacting your financial institution or tax preparation service will not help you to receive the payment faster. Neither of those organizations have control over the payment or any insight into when it will reach you.
Unfortunately, TaxAct cannot see when you will receive your payment or know why it is delayed. The appropriate bank account information used to file your 2019 tax return was shared with the IRS when your return was filed. That is the information they have to process your stimulus payment and send the money to you.
The IRS stated some payments were sent to a bank account that is no longer active. We are working with the IRS to resolve that issue in an effort to help our customers impacted by that mistake get their stimulus money as quickly as possible.
I receive social security retirement, disability, railroad retirement, VA or SSI income. Will I receive a payment again?
Yes. Like the first round, you qualify to receive a payment. The IRS will use the information from Form SSA-1099, Form RRB-1099, or the Veterans Administration to generate your stimulus payment.
My spouse doesn’t have an SSN, do we qualify to receive a payment?
Yes, the stimulus payment is available to people who have an SSN but are married to someone who does not.
This new bill expanded the eligibility for stimulus payments to include mixed-status households. That means households with different immigration and citizenship statuses may receive a payment. In fact, that expansion may be retroactive as well, meaning some individuals who were ineligible for the first round of stimulus payments may now qualify to receive that money.
If you think you may now qualify to receive a payment from the first round, TaxAct will help you accurately calculate and claim the recovery rebate as a credit on your 2020 tax return. You’ll then receive any money you qualify for as a tax refund.
What if my spouse passed away in 2019, but I filed Married Filing Jointly for 2019?
In that scenario, only you and any qualifying children will receive the second stimulus payment. You will not receive one for your spouse.
Is more relief coming?
No one really knows. President Trump called for additional stimulus money upon signing the latest COVID-19 relief bill, but that additional money has yet to be approved by Congress.
Therefore, as of now, the information stated above includes the confirmed details of the bill. As additional information becomes available, we’ll update this page.
How will TaxAct help me report my payment?
The process is simple. Once you start your 2020 tax return, you’ll be prompted during the filing process to enter information related to your stimulus payments. If you received both payments by the time you file, you will simply enter those dollar amounts, and the product will determine whether you received the right amount. If you’re owed more, the extra funds will be added as a credit to your tax refund.
If you have not received your second stimulus payment by the time you file, TaxAct will ask you a few qualifying questions to accurately calculate the amount you should receive and appropriately report it on your tax return.
For more information on the stimulus payments, check out our COVID-19 Response: Economic Impact (Stimulus) Payment FAQs.
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