Tag Archive for: stimulus payment

American Relief Act and EIP 3

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EIP 3 Payments: Treasury successfully processed 90 million payments this past week using direct deposit for the stimulus (EIP 3) payments representing about $242 billion.  In addition, they did send out approximately 150 thousand checks for $442 million for EIP recipients.   The next round of EIP 3 for this coming week will be about 30 million payments. The IRS expects to continue to send out payments weekly until they cover everyone in which they have information.  

Other Elements of the Relief Act that impacts the Tax Preparation community:   There were also a number of tax law changes in that bill that impact taxpayer not only for next year but also this current filing season.  

Unemployment Compensation Exemption The act makes the first $10,200 in unemployment benefits tax-free for 2020 tax returns in this current filing season.  This retroactive benefit is intended for each person with incomes less that $150,000.   The IRS will be providing guidance soon on how to handle this feature on not only already filed returns, but also for 2020 returns you are preparing now and in the future.  Look out for news from IRS very soon on this topic.  

Child Tax Care Credits Increased The act also increased the amount of the tax credit for 2021 tax returns for next tax season, to $3000 per child, as well as liberalizing some of the rules on the existing credit.  One of the features in the act was to instruct the IRS to make prorated payments of this new credit to those qualifying starting later in 2020.    

The IRS will provide guidance on this feature later in the year as well as instruction on options and tools to opt out of the prepayment feature.  
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2nd stimulus check update:

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If you didn’t get payment, you can now ‘Free File’ with the IRS

If you don’t receive your second stimulus payment or if you never received the first stimulus, you will need to file a tax return to get the money.

On Friday, the IRS opened up Free File, free online tax preparation products, so taxpayers can claim a credit that will help them get their payment.

While the site is open, the IRS won’t be accepting electronic returns until Feb. 12 so it can take extra time program and test its system to handle the credits that apply to the second stimulus payments, it said.https://7efd4769829af622da3600cdc3bfb07f.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html

The IRS said leading tax software providers make their online products available for free as part of a 19-year partnership with the agency. There are nine products in English and two in Spanish, the IRS said.

More than 4 million people used the free products last year, the IRS said.

IRS Free File is available to any taxpayer or family that earned $72,000 or less in 2020.

“IRS Free File providers will accept completed tax returns and hold them until they can be filed electronically once the IRS begins processing returns,” the IRS said. “The Free File Fillable Forms, the electronic version of IRS paper forms, also will be available later when the filing season begins. This product is best for people comfortable preparing their own taxes and is safe and secure.”

The IRS said each IRS Free File provider sets its own eligibility rules for products based on age, income and state residency, but those who earn less than $72,000 a year will find at least one product for which they qualify.

The agency said people who did not receive a stimulus payment will need to claim a “Recovery Rebate Credit” on their federal returns to get the benefit.

In 2020, the IRS issued two stimulus payments, known as Economic Impact Payments.

The first payments were up to $1,200 person and $500 per qualifying child. The second payments were up to $600 per eligible person and $600 per qualifying child.

Know that the IRS had until Jan. 15 to send out all second stimulus payments. If you haven’t received one, a check or debit card could still come in the mail.

Use the IRS Get My Payment tool to see if a payment was sent to you.

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