When the American Rescue Plan Act passed in March, most people in the United States became eligible for a $1,400 stimulus check. This check is available to adults under certain income limits, as well as to all of their dependents including adult dependents such as college students or elderly individuals.
The IRS has been depositing this money into people’s bank accounts and sending out checks for almost a month. On April 9, 2021, the agency started issuing its fifth batch of payments. This fifth batch didn’t just include the $1,400 checks, though. It also included approximately 700,000 “plus-up payments.”
These plus-up payments could entitle some Americans to extra stimulus money — and potentially a considerable amount of it. And the IRS has indicated that it will continue to send them on a weekly basis.
Here’s why these payments are being sent out and how to know if you have one coming.
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Plus-up payments are currently being delivered to those whose stimulus checks were too low
Plus-up payments are extra payments that the IRS is sending to people who did not receive the full amount they were entitled of the most recent stimulus check.
People may not have received their full payment if their income changed in 2020 and the IRS didn’t yet have their tax return on file for last year. This was a common occurrence, as many people saw a decline in earnings during the pandemic.
If your income in 2019 was previously above the $75,000 or $150,000 limits applicable to single tax filers or to married joint filers respectively, then you would not have received the full amount of the stimulus funds you were due. But if your income fell below this limit in 2020 and the IRS discovered this when processing your 2020 return after sending out your check, you’d be on track to receive a plus-up payment.
If you added a new dependent in 2020 (such as by having a baby or assuming responsibility of caring for an elderly family member), then you might have missed out on dependent funds when the IRS processed your payment. Once the IRS discovers your new dependent by processing your 2020 return, then you’d get the plus-up money for them.
The IRS has indicated that while it already sent out hundreds of thousands of these payments, it is nowhere close to done. It will be distributing them weekly as it processes past returns and gains the most up-to-date information. The payment will typically come via the same method that was used to distribute your original payment, so be on the lookout for a direct deposit or paper check if your third payment fell short of the amount you believe you’re due.
If you suspect you may be owed a plus-up payment, you also need to act swiftly to submit your 2020 return and provide the IRS with the information they would need to calculate your larger stimulus check amount. Submitting a 2020 return also provides you an opportunity to claim any unpaid stimulus funds from either the first or second check. You can obtain money missed from these first payments by claiming the Recovery Rebate Credit when you submit your 2020 tax return.
Don’t hesitate to get your 2020 returns in ASAP if you want to get your plus-up payment in the mail or in your bank account sooner rather than later.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/stimulus-check-update-extra-plus-up-payments-will-continue-arriving-weekly/