After months of waiting for a new round of stimulus checks, President Trump signed off the new relief bill including a second direct payment that is already being sent. What must you do if you do not get your payment or receive less than you expected?
Last week, Treasury Secretary Steve Mnuchin announced the second round of stimulus checks and many Americans have already received the money in their bank accounts, while paper checks and prepaid cards are on the way. What happens if you do not get your payment or if you receive less money than you are entitled to?
According to the IRS website, payments started going out last week and will continue through mid-January, and direct deposit payments are being made first to those that have valid routing and account information on file for direct deposit purposes.
The agency has clarified that because of the speed at which the IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active, and this will hinder the shipment.
By law, the financial institution that receives the money must return the payment to the IRS for they cannot hold and issue the payment to an individual when the account is no longer active.
While the IRS is exploring options to correct these payments, if you have not received your full payment, or a part of it, by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return.
The credit is figured like the Economic Impact Payment, except that the credit eligibility and the credit amount are based on the 2020 tax year information, including income.
For people who received a partial Economic Impact Payment, they can take the Recovery Rebate Credit for any remaining amount they’re eligible for by completing line 30 of the 2020 Form 1040 or 1040-SR.