CORONAVIRUS STIMULUS CHECKS

Will the IRS send supplemental payments to 2020 tax filers?

The tax authority is committed to completing all 'plus-up' payments by the end of the year. How is the distribution going and how many have been sent?

Will the IRS send supplemental payments to 2020 tax filers?

The IRS confirmed earlier this month that they had already began to distribute the first round of the ‘plus-up’ stimulus checks. The direct payments are used to supplement those who had received less than their full entitlement in the recent round of stimulus checks.

In total around two million of these payments have been sent to individuals who had already received money from the third stimulus check. In most cases the payment was triggered by a recent income tax filing which altered their personal situation and, therefore, their eligibility for the $1,400 direct support.

The payments will continue to be sent on a regular basis until all those who are eligible have received their money, but when will that be and how can you claim yours?

Tax return deadline change may cause stimulus check delays

The IRS is distributing the stimulus check money in the middle of a busy tax season and after 12 month of pandemic-caused chaos. Both the stimulus check distribution and the introduction of the new Child Tax Credit system are being overseen by the IRS, threatening to disrupt the tax filing process.

As such the IRS announced last month that they would be extending the tax return deadline to 17 May, giving individuals an extra month to get their financial affairs in order. However this has had a knock-on effect for the supplemental payments, which are based on the latest tax filings.

Because the American Rescue Plan was signed into law on 11 March, many stimulus check recipients will have had their payments processed before their tax return for the last year was submitted.

Filers who have experienced a loss of income during the pandemic may now be eligible for a bigger stimulus check than first thought, but they will have to wait for their tax return to be processed before the ‘plus-up’ payment can be sent. With the IRS now accepting tax returns for a month longer than initially thought, this could slow down the distribution process for some.

When will the next ‘plus-up’ payments arrive?

As the IRS gradually works through the backlog of tax return filings they will discover more people who are eligible for the supplementary payments. To keep up with that gradual flow of eligible recipients they have confirmed that they intend to continue making ‘plus-up’ payments on a rolling basis.

On 7 April they sent out the first batch of ‘plus-up' payments, with over 1.2 million people getting payments worth a total of $2 billion. The second batch was sent out on 14 April, with around 700,000 people receiving a total of $1.2 billion.

Another round of payments has not yet been confirmed for this week, but it is fair to assume that the IRS will want to continue making payments at fairly regular intervals. The text of the recent stimulus bill gives the IRS until 31 December 2021 to complete distribution of all payments related to the third stimulus checks. To check if you have a ‘plus-up’ payment on the way, use the IRS’ Get My Payment tracker tool for all the latest updates.