Still haven’t received your second stimulus check? Filing your taxes ASAP may help
Millions of people who were eligible for the first or second round of stimulus checks but never received their payments may be able to get them faster if they file their tax returns early.
The Treasury Department said in January that as many as 8 million households may be eligible for stimulus checks but haven’t received them yet. Those people can claim their payments as a Recovery Rebate Credit.
The rebate credit is “a tax credit against your 2020 income tax. Generally, this credit will increase the amount of your tax refund or decrease the amount of the tax you owe,” according to the IRS.
So, the IRS recommends if you are one of those people that you file your tax returns sooner rather than later, as most people who file electronically will get their refunds, including any Recovery Rebate Credits, within a few weeks.
The IRS estimates more than 150 million tax returns will be filed this year and nine out of 10 people will get their refund within 21 days of filing with direct deposit.
Tax season officially begins on Feb. 12, and the deadline to file is April 15. You can track your tax refund using the IRS’ tool Where’s My Refund after you file your return.
Timing may differ depending on wage changes
If you aren’t looking for older payments but looking ahead to a potential third check, the best timing for filing your tax return can depend on if a taxpayer’s adjusted gross income changed between 2019 and 2020.
If you earned less in 2020 than you did in 2019, you’ll want to file your return as soon as possible before the third stimulus package is passed. Doing so may help ensure you fall under the proposed income eligibility cap.
House Ways and Means Chairman Richard Neal, a Massachusetts Democrat, released legislation on Monday that would provide $1,400 checks to individuals earning $75,000 a year and married couples earning $150,000 a year — the same income thresholds in President Joe Biden’s $1.9 trillion emergency plan released in January. The plan has a faster phase-out than in previous proposals, capping payments at $100,000 for individuals and $200,000 for couples.
According to the latest stimulus relief proposal, the IRS will determine your third stimulus check on your 2019 or 2020 taxes depending on the most recent one it has on record. If you had a baby last year or made less money in 2020 than in 2019, you may not get your full payment if the IRS bases your next stimulus check on your 2019 tax return.
For example, if a taxpayer made $100,000 in 2019, she wouldn’t get any money under the recent plan, but if her income was $70,000 in 2020, she’d be eligible for a $1,400 check.
People who earned more in 2020 compared to 2019 on the other hand may want to wait to file their return so their eligibility for a third payment is based on their 2019 income.
This story was originally published February 11, 2021 at 3:24 PM with the headline "Still haven’t received your second stimulus check? Filing your taxes ASAP may help."