Third stimulus check: who would receive money earlier and why?
Democrats are working on the details of a massive stimulus bill with a third stimulus check. What can you do to get paid the maximum possible, fast?
President Joe Biden's $1.9 trillion American Rescue Plan (ARP), the coronavirus economic relief package is very likely to include a booster $1,400 third stimulus check to add to the bipartisan $600 pay out in December, for eligible individuals.
With lawmakers set to negotiate another round of coronavirus relief aid, many Americans are growing restless to when they might get their third stimulus check, and how much it might be . However, what you might not know is that your 2020 tax returns will also affect stimulus payments alongside Congress' own time frame for passing the legislation.
Nancy Pelosi has emphasised that she’s keen to push through Democrats’ stimulus bill by mid-March – more on this below. In tandem, the IRS officially started accepting tax returns on 12 February, with the filing window closing on its usual date of 15 April.
So depending on Congress’ eventual timeline, the IRS may start distributing stimulus checks in the middle of tax season, which could affect how much Americans get - especially households that lost income last year or who had a child in 2020 for instance, say CBS.
This is because the IRS relies on each individual's most recent tax filing to determine the size of stimulus payment they are entitled to.
How Filing Your Tax Return Early (or Late) Could Boost Your Third Stimulus Check | Kiplinger https://t.co/DSwlZgIJXw— Kiplinger (@Kiplinger) February 16, 2021
Why does when you file your taxes affect your stimulus check?
If you file your 2020 tax returns after Congress passes its next relief bill, the agency will likely rely on their 2019 tax return to calculate their stimulus check payment, as that would be the most recent information they have to calculate your income.
For example, that 2019 return might not reflect income losses during last year's economic crisis or a new child.
"I would suggest that people file as soon as possible, especially with 75% of taxpayers last year receiving a tax refund close to $3,000," said Lisa Greene-Lewis, a tax expert at TurboTax speaking to CBS. "We are hearing a lot of people say, 'I had a baby in 2020, how will the IRS know this? When they issued the previous stimulus payment they didn't know that.'"
Timeline for stimulus checks before 14 March deadline
If all goes swimmingly with negotiations and a version of the bill with stimulus checks passes through Congress, there are two possible timelines that Cnet have drawn up, both following the assumption that the 14 March deadline that Pelosi imposed can be met, after which some existing pandemic benefits will expire.
The first scenario requires Congress to pass the bill by Friday 26 February – this could happen, but is not likely. In this case, Biden would sign the bill into law on Monday 1 March and the IRS would send the first direct deposit checks the week of 8 March, with paper checks sent 15 March and finally EIP cards the week of 22 March.
The second timeline has Congress passing a bill by Friday 12 March and in this case President Biden could pass the bill on Sunday 14 March. The week of 22 March is when the IRS would begin paying the direct deposits to bank accounts, followed by paper checks on 29 March and finally EIP cards on 5 April.
Find out how your federal tax return filed before 15 April 2021 could affect how much you get in your stimulus.
Who will get their stimulus first?
One way to be in with a chance of getting your stimulus check in the first round is by ensuring that your direct deposit details are up to date in the records of the IRS, and that you don’t rely on getting paid by paper check or by EIP card; the latter methods are processed slower and released later by the IRS.
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