While millions of Americans have already accepted the stimulus check included in the CARES Act, they are impatiently waiting for Congress to finally pass a coronavirus relief package with another one. However, due to unusual errors, the Internal Revenue Service made while putting the Economic Impact Payment together, some Americans have not even received their first payment. The IRS has worked to fix these, and Americans could begin receiving their missing payments soon.
The CARES Act was passed by Congress and signed into law by President Donald Trump in late March, with the first round of stimulus payments sent out in mid-April. Americans received the payment as a direct deposit and a physical check, although the IRS began sending the payment as a pre-paid debit card towards the end. In June, the IRS said almost $27 billion was sent to over 159 million Americans.
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Most American taxpayers qualified for the stimulus check if they filed their federal taxes for 2018 or 2019. Individuals with an adjusted gross income of $75,000 or less received the full $1,200 payment. Couples who filed together and earned $150,000 or less received $2,400. Dependents under 17 were supposed to receive $500 added to the payment issued to their parents or guardians. Americans who do not have to file taxes could also use the “Non-Filers” tool to apply for checks. There were some errors though, and the IRS has sought to fix those in recent weeks.
Some dependents didn’t get the $500 payment if their parent or guardian did not have to file for taxes
Due to a glitch in the Non-Filers tool, people who used it to apply for payment before May 17 and claimed at least one dependent did not receive the $500 added to their stimulus check. In early August, the IRS said the $500 payment would be sent to individuals who supplied direct deposit information would receive the payment automatically deposited on Aug. 5. Paper checks or debit cards were scheduled to be mailed on Aug. 7. The fix came after Rep. Richard Neal, the Chairman for the House Ways and Means Committee, and Sen. Ron Wyden, the top Democrat on the Senate’s Finance Committee, sent a letter to the Treasury Department and the IRS, noting that “almost half a million individuals who did not receive payment for dependents they registered on the non-filer portal.”
The IRS is sending payments to taxpayers who claimed an ‘injured spouse’
The IRS also needs to send new payments to individuals who claimed an “injured spouse” on their jointly-filed tax returns. The “injured spouse” form, Form 8379, is needed to let the IRS know the spouse without child support and other past-due obligations should receive the tax refund separately. The IRS is sending the “injured spouse” portion of the stimulus check to them separately if it was wrongly withheld, National Taxpayer Advocate Erin Collins explained to MarketWatch, and they should receive this check by the end of August.
Joint return with a deceased spouse
When stimulus checks were first mailed out, there were several anecdotes about deceased family members receiving stimulus checks, so the IRS had to tell families they needed to send the checks back. However, Collins’ office identified an error with this. A taxpayer who filed jointly with a spouse who is now deceased may have needed to return the entire check. In this case, the IRS will have to send out a new payment for just the surviving taxpayer. These payments will be sent out in the “coming weeks,” Collins wrote.
Some payments were based on the wrong tax filing year
The IRS based the stimulus payments on the most recent tax information on file. This means if the payment was sent out before a taxpayer filed for 2019, it was based on their 2018 filing. In this case, the taxpayer can “reconcile the differences on 2020 tax return and receive the additional amount in 2021,” according to Collins.
Some Social Security beneficiaries received more time to register for the additional $500 for children
This week, many Social Security beneficiaries were given a new deadline for registering to receive an additional $500 per child. On Friday, the IRS said they now have until Sept. 30 to apply on the Non-Filers tool beginning on Aug. 15. Most Social Security beneficiaries, Railroad Retirement, and veterans pension recipients do not have to file tax returns if their income is under the filing threshold, notes CNN. They received their $1,200 payments automatically, but they needed to apply for dependents’ payment if the IRS did not have that information already. The first deadline was on April 22 and the IRS was criticized for only giving 48-hours notice. The Center on Budget and Policy Priorities said about 600,000 children dependents could have missed the payment without the deadline being extended.
The IRS has no estimate on the number of payments missing due to errors
The IRS now estimates it has sent 160 million stimulus checks since the CARES Act passed, but it is not known how many payments may have been missed due to errors. “Unfortunately, we don’t have enough information to make an estimate, and the IRS has not provided an estimate,” Howard D. Brooks, public affairs specialist for the Taxpayer Advocate Service, told the Detroit Free-Press on Thursday. Anyone who has not received their first payment can now call the IRS’ EIP information number at 800-919-9835. Some taxpayers can also contact the National Taxpayer Advocate helpline at 877-777-4778.
