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Millions of Americans have received their economic stimulus payments of up to $1,200 a person. But some are taking a look at those sums and wondering what happened.
Some are finding that those checks are made out for less than they were expecting. Others may find that they receive more than they thought they were entitled to.
False expectations with regard to payment amounts could be one reason for the misunderstandings. The checks are based on your adjusted gross income from either your 2019 or 2018 tax return, whichever is most recent.
It is also based on your tax filing status – married or single – as well as any dependents you have under age 17.
There are other variables that affect the amount of those checks, particularly if you are above certain income thresholds — $75,000 for individuals and $150,000 for married couples. For income above those levels, your government check will be reduced. Payments phase out completely for income above $99,000 for individuals and $198,000 for couples.
The IRS has provided information to help Americans calculate how much their payment will be.
Still, because the government rushed the money out to help Americans, there could be inaccuracies.
Here’s what we know now about how those situations will be handled.
If your payment fell short
Some individuals have reported that they got paid far less than they expected.
Some reasons for that may be legitimate. If you are behind on child support, you may have missed out on a check. If you are married to a non-citizen, you could also have been shut out of the one-time payment, based on the terms of the legislation that authorized the payments.
Still, many have complained that their payments fell short for one key reason: The checks did not include their children under 17, who are each eligible for $500.
For families with multiple children, that could amount to a large sum.
“If you did not receive the full amount to which you believe you are entitled, you will be able to claim the additional amount when you file your 2020 tax return,” the IRS states on its website.
The agency also advises that you keep the form you receive regarding your stimulus payment, Notice 1444, and refer to it when you file your 2020 return. At that time, you should be able to claim the additional credits to which you are eligible.
“I would be hopeful that we would get more guidance in the interim, especially with the intent of these economic impact payments is to provide cash liquidity to vulnerable households now, ” said Garrett Watson, senior policy analyst at the Tax Foundation.
If you received too much money
Meanwhile, some people have reported the opposite problem – their stimulus checks were too generous.
This could have happened if divorced parents both received $500 payments for the same child or children.
The guidance from the IRS on this is mixed.
For those families who receive duplicate payments for dependent children, they likely will not have to pay the money back.
“There is no provision in the law requiring repayment of a payment,” the IRS states on its site.
But both of those parents should keep the notices on their stimulus payments that they receive for their 2020 tax records.
In other cases, taxpayers eligible for stimulus payments have died but were sent checks anyway based on their 2018 or 2019 tax returns, and relatives received the money.Those sums should be returned to the IRS, the agency states on its website, along with directions on how relatives or other associates can give back the money.
If the deceased individual was married, their spouse only needs to return the money intended for their deceased partner.
If you’re still waiting
While a majority of the one-time checks have gone out, others are still asking: Where’s my money?
The answer to that question is that your money is likely still on its way.
The government is in the process of mailing out paper checks, while some people could receive their money via a prepaid debit card.
The process for sending out all of the payments could take months, according to a Congressional timeline.
More from Invest In You:
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If you do not receive your money this year, it will likely come to you during tax-filing season next year. Individuals eager to reconcile those payments will have to stay tuned for more guidance.
“They will get it one way or another,” Watson said. “The big question is just is that adjustment going to happen this year or is it going to happen next spring?”
The latest information from the IRS points to the 2020 tax-filing season.
“The IRS will provide information on what actions you need to take when you file your 2020 tax return when they are available,” the agency states on its website.
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