The IRS says they have delivered the stimulus checks to many that qualify, however, banks beg to differ.
Why is my stimulus check so scrawny? Why am I getting far less than I thought I would?
As much as you’d like to be happy about seeing a stimulus check in your mailbox – or spotting the direct deposit in your bank account – sometimes, you end up wondering why you didn’t see more money.
And more people than some might imagine are miffed. The Internal Revenue Service even now has listed a group of reasons for why the dollar amount of your Economic Impact Payment could be, as the IRS delicately puts it, “different than anticipated.”
Many people already have received stimulus payments of up to $1,200 for singles and up to $2,400 for couples, plus $500 for dependent children ages 16 and younger.
But those amounts aren’t guaranteed. They will vary based on your income. And in some cases, you might not see any money at all.
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Here’s a look at some reasons why your stimulus might have fallen a little short:
Is there a hold up with your 2019 federal income tax return?
If you qualify, you’re automatically going to get stimulus money if you filed a 2018 or 2019 tax return.
You aren’t required to file your 2019 return until July 15, as the traditional April 15 deadline was extended as part of the economic relief efforts during the coronavirus crisis.
And if you haven’t filed the 2019 tax return yet, it’s OK. You’d still get stimulus money. The IRS is going to use information from the 2018 return.
If you filed the 2019 return, though, you could be experiencing some delays.
The IRS says it typically would calculate the Economic Impact Payment based on your income and information on the 2019 return.
But it is possible, based on the IRS’s statement on Monday, that the IRS has not finished processing your 2019 tax return. Just because the IRS accepted your return electronically, of course, it does not mean that the IRS has completed processing the return.
And there seems to continue to be a backlog of 2019 tax returns to process. Remember, some people were filing returns in late April and even early May.
In addition, the early efforts to stem the spread of COVID-19 led to shutdowns at processing facilities where many employees were sent home. During the last week of April, thousands of IRS workers were called back on the job to deal with an ever-growing pile of work.
Now, the stimulus money needs to rush out the door after millions of consumers have been complaining that they haven’t yet received their money. (The IRS and Treasury Department say that nearly 130 million Economic Impact Payments have been successfully delivered so far. That still would leave millions undelivered.)
So, if the 2019 return isn’t ready, the IRS is going with 2018 information.
The IRS said Monday that if it used the 2018 tax return information, it is possible that your Economic Impact Payment would not include money for a dependent child, such as if your child was born or adopted in 2019.
As a result, you could be $500 short. Or if you had twins in 2019, you could be $1,000 short.
You can’t fix this problem right now. You could make adjustments when you file your 2020 federal income tax return in 2021.
Or maybe your income was higher in 2018 than it was in 2019, which would mean you might get less money for adults in the family. Again, you’d be able to make adjustments when you file the 2020 tax return. You’re going to have to wait a year or so before this can be fixed.
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Do you or your spouse owe past-due child support?
Again, your payment will be smaller than expected. And it could be even worse than you might imagine, thanks to a glitch.
The federal Bureau of the Fiscal Service will send a notice to indicate if a stimulus payment was reduced as a result of previously owed child support.
Yet there have been some problems for couples when it comes to the “injured spouse” claims. And plenty of people are upset to see their stimulus checks cut far more than they should be reduced.
Let’s take a step back: If you’re married and filing jointly, it is possible to get back your share of a federal income tax refund if the refund has been reduced to apply to a debt owed by your spouse, not you.
You’d need to file a Form 8379, the Injured Spouse Allocation. It only applies if you file a joint return. And this only works if the debt is the liability of only one of the spouses.
Now, when it comes to stimulus payments, the IRS should be taking those injured spouse claims into account.
Only the stimulus payment for the spouse on the joint return who owes past-due child support should be offset.
On Monday, the IRS acknowledged: “The IRS is aware that a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return (or 2018 tax return if no 2019 tax return has been filed) may have been offset by the injured spouse’s past-due child support.”
The IRS said it is working with the Bureau of Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve the issue as quickly as possible.
“If you filed an injured spouse claim with your return and are impacted by this issue,” the IRS said, “you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved.”
The IRS stated: “We apologize for the inconvenience this may have caused.”
Did you make too much money?
The maximum stimulus payment goes to those who have an adjusted gross income of up to $75,000 for single filers, $112,500 for head of household filers and $150,000 for married filing jointly.
If your adjusted gross income is higher than those amounts, the stimulus check will be reduced by $5 for each $100 above those thresholds.
So some married households with no children might get $1,000 or less – not the full $2,400 – if say their adjusted gross income was $178,000 or higher.
And you would not qualify for any stimulus money if you’re single with an adjusted gross income that’s above $99,000. The stimulus check won’t arrive at all for those with adjusted gross incomes of $136,500 for head of household filers and $198,000 for joint filers with no children.
What about the $500 for my kids?
You might love your children equally but the stimulus program won’t treat them all the same.
If your son or daughter is 17 or older and claimed as a dependent, you’re not getting an extra $500.
What about $1,200 for my son in college?
In many cases, the college student won’t get that money either.
The IRS notes that “a 20-year-old full-time college student claimed as a dependent on their mother’s 2019 federal income tax return is not eligible for a $1,200 Economic Impact Payment.”
And the parent isn’t getting an extra $500 for that college student if they do not qualify as a child age 16 or younger.
And other scenarios might apply. Say your 2019 tax return wasn’t processed yet before the IRS calculated the Economic Impact Payment.
If the student was claimed as a dependent on a 2018 tax return, the student might not get the stimulus now.
But there could be some good news next year for some.
“If the student cannot be claimed as a dependent by their mother or anyone else for 2020,” the IRS said, “that student may be eligible to claim a $1,200 credit on their 2020 tax return next year.”
“Wait until next year” could be the answer for many.
The Economic Impact Payment is “an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return,” the IRS said.
Keep the letter you receive by mail a few weeks after the stimulus payment is issued.
When taxpayers file their return next year, they can claim additional credits on their 2020 tax return if they are eligible for them.
The good news: The stimulus payment isn’t going to reduce the taxpayer’s refund or increase your tax bill when you file a tax return next year.
The stimulus also is not taxable, the IRS said, and should not be included in income on a 2020 return.
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