Haven’t received your second respite check yet? You’re not alone.
While the IRS and the Treasury have distributed the bulk of the planned $ 164 million in second round relief payments to Americans faster than the first time around, millions have yet to receive payments or have found a hiccups in the distribution.
The final payments of $ 600 per eligible adult and dependents are badly needed among those experiencing financial hardship due to the pandemic.
Here’s what someone waiting for a payment needs to know.
WHY DIDN’T I RECEIVE THE PAYMENT?
First of all, make sure that you are eligible. As part of this latest round of relief, payments of $ 600 will go to people earning less than $ 75,000 or $ 150,000 for married couples filing jointly. Those who earn more will get a reduced amount. There are no payments for people who earn more than $ 99,000 per year.
Unlike last time, payments will not be denied to Americans married to someone without a Social Security number.
If you are eligible, check the IRS Get My Payment tool on its website to find out the status of your payment.
As with the last round, most payments will be automatic and made by direct deposit to bank accounts.
However, some people may find that they receive their payment in a different form this time around. Payments are distributed by direct deposit or by mail, either in the form of paper check or debit card.
It also appears that there was a major snafu this time for people who filed their tax returns with an online tax preparation service like TurboTax or H&R Block and paid their tax preparation fees with their scheduled refund. In these cases, the IRS website may show that the money went to an account they do not recognize. This is because the money may have been sent to a temporary bank account opened by the tax preparer, which has not been active for a long time.
By law, the financial institution must return the money to the government if the account is closed or no longer active. A number of taxpayers have expressed their frustration with the situation online, including many who got their payments easily the first time around.
The National Consumer Law Center estimates that up to 20 million Americans could be affected by this latest administrative problem.
“It is disappointing that the IRS has not addressed this issue, which it has known about for months,” said Lauren Saunders, associate director of the National Consumer Law Center. “People who need the money now may have to wait months before they can file a tax return and get their refund, unless the tax preparation companies are able to transfer the funds.”
HOW LONG WILL IT TAKE?
The IRS and the Treasury began distributing payments last week. By law, they have until January 15 to make payments.
Payments made by direct deposit could take a few days, but funds were widely available at the start of this week. Payments sent by mail could take three to four weeks to reach people. The Treasury announced on Thursday that it had started sending about 8 million economic impact payments by prepaid debit card. Taxpayers are encouraged to watch their mail closely for incoming checks or debit cards.
People who did not receive the first or second set of payments owed to them or who received an incorrect amount can claim the recovery refund credit on their 2020 tax return to get their payment.
WHEN DOES THE TAX SEASON START?
The IRS has not indicated when it will begin accepting tax returns for this filing season, but tax season typically begins at the end of January. Some tax filing services will allow clients to file before this date.
Electronic filing is the fastest and most secure way to process a return. In the past, the IRS would issue refunds within 21 days of the date the return was received.
WHY DID I GET AN ERROR MESSAGE ON THE IRS SITE?
The Get My Payment tool is useful but can be difficult to understand.
Do not be concerned if you receive the “Please wait” message, which is part of the normal operation of the site. If you get the message “Payment Status # 2 – Not Available”, you will not receive the payment and will have to claim it on your tax return instead.
It is only updated once a day, so checking it multiple times might be unsuccessful. Also, it can lock out users if it is accessed too many times; this is designed to prevent fraud.