Economic Impact Payments (EIPs) are still on the minds of my readers. The most common questions I’m getting have to do with payments that are lower than expected.
For example, here is R.B.’s story:
“I am a single 69-year-old retired man. I receive a monthly [Social Security] check in the amount of $1,852 and a pension in the amount of $4,028, totaling $70,560 yearly.
“I have all my bank statements dating from Dec 18, 2020, to March 17, 2021. They show that the only stimulus check I have received was one for $283.65 titled EIP2 on Jan 5, 2021.
“Would you have any opinion as to why only $283.65 has been the sum total since the beginning of the stimulus program? Please tell me how I should proceed.”
If you are in a similar position, you’ll want to turn to the IRS for answers. For some direction, you can call the IRS at 800-919-9835, a telephone line dedicated to EIPs.
You will be given instructions on how to proceed, or you can go directly to the IRS website dedicated to EIPs at tinyurl.com/ez3dsb8u.
There you will see that the IRS has in place a mechanism for you to check your EIP amounts based on eligibility requirements (more on that shortly); you can also check EIP payments for the third round by using the “Get My Payment” tool (tinyurl.com/um7wjjk9).
According to IRS FAQs, as a single filer, R.B.’s AGI (adjusted gross income) cannot exceed $75,000 to qualify for the full EIP2 of $600. In his case, his total income is $70,560, which should warrant the full payment. His AGI could be even lower than $70,560 if there are “adjustments,” such as educator expenses, student loan interest, alimony payments or contributions to retirement plans.
Could his AGI be higher than $75,000, which would justify a reduction in the payment to $283? Perhaps. Was any other income reported at tax time, perhaps from dividends, interest or capital gains, that pushed his gross income above $75,000? To find the answer, R.B. would check line 11 of his tax return -- Form 1040 or Form 1040-SR, which is an alternate tax form for taxpayers 65 or older.
If he’s above the maximum limit, R.B.’s EIP2 would be reduced “by 5% of the amount by which your AGI exceeds the applicable threshold,” quoting the IRS FAQ at tinyurl.com/54s4mapx.
Let’s assume R.B. qualifies for EIP1 or the full EIP2. He would claim the 2020 Recovery Rebate Credit (tinyurl.com/wv6euhbj), which covers both EIP1 and EIP2. The credit (if any) will be claimed through his 2020 tax return. Since he likely has already filed his 2020 return, he can file Form 1040-X, “Amended U.S. Individual Income Tax Return.” More details on Form 1040-X can be found at tinyurl.com/4c4azved.
What if you don’t normally file a tax return? According to the IRS, you must file a 2020 tax return to claim the Recovery Rebate Credit, even if you are not normally required to file one. Also, you will need to know the amount of any first and second EIPs you did receive.
As for EIP3, the IRS announced that as of May 12 (tinyurl.com/2chryffz), it had sent out a total of approximately 165 million payments, with a total value of $388 billion, since March 12.
Please continue sending your questions and comments to firstname.lastname@example.org. I look forward to reading them.
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Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (email@example.com). Please visit www.juliejason.com.