In mid-April 2020, the IRS began to send out stimulus checks to offset the economic impact of COVID-19. Already, 90 million people have received their money.
For those who have received their stimulus checks, they now have a minimum of $1,200 they can spend however they see fit. For those who have not received any stimulus money from the government, it is another source of stress.
As of April 17, the IRS distributed 88.1 million stimulus checks and paid out $157.96 billion. This is according to statistics released on April 24. According to a timeline created by the House Ways and Means Committee, the IRS began mailing stimulus checks the week of April 20. The IRS plans to mail out five million checks each week for up to 20 weeks. The timeline showed that the stimulus checks were mailed to those who had the smallest incomes first.
It is of little comfort to hear, “The check is the mail,” for those who are tight on cash and behind on bills.
According to the Federal Deposit Insurance Corp., which conducted a survey in 2017, 14 million Americans do not have bank accounts. That accounts for 6.5 percent of American households. How will they receive their stimulus checks?
The FDIC is encouraging people to open bank accounts so they may receive their stimulus payments faster. Consumers who have bank accounts could also bypass fees from check-cashing businesses, some of which charge more than $100 to cash a stimulus check for a family of four. This information comes from an analysis provided by Miami’s Mayor Francis Suarez in a MarketWatch op-ed.
After Americans open a bank account, they can submit their banking information to the IRS. For those who do not file tax returns, they will have to submit their bank account information via the IRS website. There is a link for those who do not file tax returns or did not last year.
Americans who filed but did not provide the IRS with their banking information, they can submit their direct deposit information through a tool called Get My Payment on the IRS website. This is a tracking tool that will show the stimulus payment status. However, it does not give everyone the information it was designed to.
For those who receive no answer from the Get My Payment IRS tool, there is a reason. According to the IRS, it could be due to the agency still processing the person’s 2019 tax return. It could also be because the person does not file a tax return and has submitted the non-filier information through the IRS web portal and that is still being processed.
“We update Get My Payment data once per day, overnight so there is no need to check more often,” states the IRS website.
Some people will not receive a stimulus check because they make too much money. According to The Coronavirus Aid, Relief and Economic Security Act, the legislation’s official name that forms the acronym CARES, $1,200 stimulus payments are to be made to individual Americans who make less than $75,000 and $2,400 to married couples who make less than $150,000. Additionally, the legislation pays parents $500 for each child under the age of 17.
Stimulus payments are reduced by $5 for every $100 above the $75,000/$150,000 threshold. Therefore, anyone who makes more than $99,000 does not qualify, nor do couples making over $198,000.
Some national tax preparers offer advances on a client’s refund. They load the money onto a debit card, therefore, the IRS might not be placing the money in the correct account. However, H&R Block and Jackson Hewitt said they are working to ensure all of their customers receive the money they are entitled.
According to H&R Block, the IRS has their client’s banking information. They stated that the IRS “created confusion by not always using clients’ final destination bank account information for stimulus payments. We share our clients’ frustration that many of them have not yet received these much-needed payments sue to IRS decisions, and we are actively working with the IRS to get stimulus payments sent directly to client accounts.”
Jackson Hewitt is encouraging its customers to use the Get My Payment IRS tool to update their direct-deposit information. However, if the IRS already put the money on a Serve or Bluebird card that the consumer no longer has, go to that account and ask for a replacement card.
“Serve customers who would like to receive their stimulus payment to their Serve Account should confirm their direct-deposit information with the IRS and update it if necessary.” Jackson Hewitt has more information on their website.
The wording to the CARES legislation does not prevent debt collectors from seizing stimulus checks that are deposited into a bank account.
An associate director at the National Consumer Law Center, Lauren Saunders, stated there are steps that can be taken so consumers can keep their stimulus money. One way would be to cash the stimulus check and not deposit it into a bank account.
Ten states and Washington, D.C. are enacting orders that prevent the garnishment of stimulus payments.
The stimulus payments are being made to U.S. citizens and certain categories of non-U.S. citizens including “legal permanent residents,” according to the IRS.
Nonetheless, if a person has a pending green-card application, they may not receive a stimulus check, at least not anytime soon, says Washington, D.C. immigration lawyer Allen Orr. The U.S. Citizenship and Immigration Services field offices closed in March due to the pandemic. This is the office that conducts the interviews before issuing green cards. Right now, offices are scheduled to reopen on June 3, tentatively.
Orr believes that when the office reopens, green cards will be issued at a slow pace making it take longer for new green-card holders to receive their stimulus checks.
Being married to a green-card holder may not mean a second stimulus check, according to Orr. If a U.S. citizen married a green-card holder before they received permanent-resident status, they should be receiving a stimulus check. However, if they were married afterward, they will not receive the same benefit.
Additionally, the IRS has experienced glitches in getting the stimulus payment out to U.S. citizens. The stimulus payment rollout has been particularly confusing for those who receive Social Security. The Center on Budget and Policy Priorities reports that over 15 million Americans on Social Security do not file tax returns.
On April 1, the IRS announced that Social Security recipients will be issued automatic stimulus payments. This will be based on SSA-1099. This is a tax form the Social Security Administration mails out in January. It shows the total amount of benefits received for the year. The agency will use RRB-1099 for those receiving Railroad Retirement benefits.
The SSA and RRB 1099 forms do not contain any information about dependents, therefore, Social Security, survivor, disability, and Railroad Retirement beneficiaries will only be receiving $1,200. There will not be an additional $500 per dependent under 17. In several of these cases, the IRS did not have the tax information to immediately send out checks.
In April, the IRS was still figuring out how to send out automatic payments to beneficiaries who receive Supplemental Security Income (SSI). This program is a needs-based program for those with limited income and resources who are disabled, blind, or over 65. Blind or disabled children can also receive SSI. The money for this program comes from general tax revenue and not Social Security taxes, therefore, these Americans do not receive a SSA-1099.
On April 10, the IRS put together a tool for those who did not file taxes last year, or the year before, or who do not normally file a tax return. These people can use the tool to enter their payment information so they may receive their stimulus money.
Please understand, those who filed tax returns for 2018 or 2019 will receive their payments automatically. There is no action to be taken.
According to Eric Smith, an IRS spokesperson, the CARES Act does not allow the IRS to access bank account information used to make tax payments — only bank accounts used for electronic deposits of refunds.
On April 20, the IRS announced that Social Security, survivor, disability, and railroad retirees have to act by noon on April 22 to receive the $500 for dependent children. The deadline was necessary because it would be sending out the $1,200 payments to this group. Once the money is processed, funds for children cannot be added. On April 24, SSI and VA benefit recipients were notified they had until May 5 to claim dependent children.
The IRS reminds Americans who are low-income to use the free non-filier tool on their website. However, there are community concerns that many low-income Americans do not have internet access.
A spokeswoman for the Treasury announced that those who receive Social Security, survivor, and disability payments should receive their stimulus payments by April 29. It is May 4, and still many have not received the money they were promised.
One reason for this delay would be if people on these benefits filed a tax return. The IRS system may have defaulted them to receive their payment based on the filed return.
For those who filed a 2018 or 2019 tax return and did not receive a refund or do not owe any taxes, the agency does not have bank account information for these people. Unless these people have successfully used the “Get My Payment” tool, they will be mailed a check.
For most people the deadline to claim dependents has expired, however, for those who receive VA and SSI benefits, the deadline is May 5.
By Jeanette Vietti
Sources:
MarketWatch: Why haven’t I gotten my stimulus check” 6 reason your payment might be a no-show
The Washington Post: A timeline of IRS stimulus payment glitches
IRS.gov: Economic Impact Payments
Image Courtesy of Pictures of Money’s Flickr Page – Creative Commons License