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Are the third stimulus checks included in 2021 IRS tax filing?

The US government is in the process of sending out a third round of stimulus payments. The $1,400 stimulus checks are an advance tax credit for 2021.

The US government is in the process of sending out a third round of stimulus payments. The $1,400 stimulus checks are an advance tax credit for 2021.

The first two rounds of Economic Impact Payments (EIP) were advanced tax credits for 2020. Taxpayers will now need to file a 2020 tax return, if they haven’t already, to claim any missing money that was coming their way from the first and second EIP using the 2020 Recovery Rebate Credit.

The third round of EIP, the $1,400 direct stimulus payments, is an advanced credit for the 2021 fiscal year based on 2020 tax filings. However, the federal government isn’t waiting until those tax returns are processed to send out payments. In the four batches to date more than 156 million payments have been sent already.

You could see additional stimulus payments in 2021 or even 2022

If you filed a 2019 tax return the Internal Revenue Service (IRS) will automatically send out the EIP3 based on the information the agency gets from that filing. Then when you file a 2020 tax return, and it gets processed, the agency will adjust your payment with a “plus-up” if you are eligible for larger payment. Being that the third round is a tax credit for the 2021 fiscal year, some tax payers may become newly eligible to receive an additional payment for a number of circumstances when they file their 2021 tax return next year.

New payments will be made to those who didn’t qualify based on their 2020 tax filings but do according to their 2021 tax return. If for some reason during 2021 your income drops below the income eligibility cap, you could claim the EIP3 on the 2021 Recovery Rebate Credit. Likewise, if you have a new addition to the family that didn’t receive a third stimulus check this year, you’ll be able to claim that dependent in 2022, for example a newborn baby.

Who is eligible for the $1,400 stimulus check?

The income eligibility requirements to receive the full $1,400 per person in the third round of stimulus payments remained the same. However, the payments phased out much faster than in the previous rounds, so even though you received a payment in the first two rounds, you may not be eligible for a third.

Individuals with an adjusted gross income (AGI) less than $75,000, married couples filing jointly making under $150,000 and heads of household earning below $112,500 will get the full amount per person claimed on tax returns. Above those limits the size of the stimulus payment phase out much faster than before, until those making $80,000, $160,000 and $120,000 or more, respectively, will not get any money from the third round of stimulus based on their 2020 tax return. Should you fall below those limits in 2021, you would be able to claim the money you missed out on as a tax credit in 2022, either reducing what you owe or added onto your tax refund next year.

The IRS is looking for millions of taxpayers its owes money

The IRS reached out to locate millions of taxpayers whose income is below the threshold requiring them to file a tax return during the fall. They still haven’t located around 8 million people who were eligible for the first two rounds of stimulus checks, and foreseeable the third. Many of these “Non-Filers” are homeless or low-income households who can only claim their stimulus money by filing a tax return in 2020.

Likewise, the IRS is looking for 1.3 million people who didn't file a 2017 tax return and who might be owed a refund on taxes withheld or that were paid but not received. The agency says that there's more than $1.3 billion of potential refunds waiting to be claimed, with a median potential refund estimated to be $865. Taxpayers have a maximum of three years to claim past refunds before the government keeps the money. Those taxpayers missing their 2017 refund have until 17 May, the tax filing deadline this year, to claim that money.


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