Congress passes second round of economic impact payments (EIP).
Congress has passed a second round of Economic Impact Payments (EIP) under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. The Treasury Department has issued information on the latest round of relief payments answering questions such as, who is eligible, how EIP payments will be processed and other important information on their website. For full information please see: Treasury and IRS begin delivering second round of Economic Impact Payments to millions of Americans | Internal Revenue Service
As with the first round of EIP in 2020, payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by November 21, 2020 or who submitted a simplified tax return that has been processed by the IRS.
Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
One important change for the second round of EIP relates to those who file taxes jointly with one individual using a US Social Security Number and another using an ITIN (Individual Tax Identification Number). Under the earlier CARES Act, joint returns of couples where only one member of the couple had a Social Security Number were generally ineligible for a payment – unless they were a member of the military. But the new law changes and expands that provision, and more people are now eligible. In this situation, these families will now be eligible to receive payments for the taxpayers and qualifying children of the family who have work-eligible SSNs. People in this group who don’t receive an Economic Impact Payment can claim this when they file their 2020 taxes under the Recovery Rebate Credit.
Individuals can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers, see: Get My Payment | Internal Revenue Service (irs.gov). The IRS will use the data already in their systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.*
*This information has been provided to ACA by the IRS and Treasury Department via their websites. Individuals should reference the links provided for complete information.