Q&A: Economic Impact Payments

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21 Apr Q&A: Economic Impact Payments

Millions of eligible Americans have already received their Economic Impact Payments (EIPs) via direct deposit or paper checks, according to the IRS. Others are still waiting. The payments are part of the Coronavirus Aid, Relief, and Economic Security Act. Answers to questions you may have about EIPs are included below.

Who Is Eligible For An EIP?

Eligible taxpayers who filed their 2018 or 2019 returns and chose direct deposit of their refunds automatically receive an EIP. You must be a U.S. citizen or U.S. resident alien and you cannot be claimed as a dependent on someone else’s tax return. In general, you also must have a valid Social Security number and have an adjusted gross income (AGI) under a certain threshold.

The IRS also says that automatic payments will go to people receiving Social Security retirement or disability benefits and Railroad Retirement benefits.

How Much Are The Payments?

EIPs can be up to $1,200 for individuals or $2,400 for married couples, plus $500 for each qualifying child.

How Much Income Must I Have To Receive A Payment?

You do not need to have any income to receive a payment. But for those with higher incomes, the payments phase out. The EIP is reduced by five percent of the amount that your AGI exceeds $75,000 ($112,500 for heads of household or $150,000 for married joint filers) until it is $0.

The payment for eligible individuals with no qualifying children is reduced to $0 once AGI reaches:

  • $198,000 for married joint filers
  • $136,500 for heads of household
  • $99,000 for all others

Each of these threshold amounts increases by $10,000 for each additional qualifying child. For example, because families with one qualifying child receive an additional $500 payment, their $1,700 payment ($2,900 for married joint filers) is reduced to $0 once their AGI reaches:

  • $208,000 for married joint filers
  • $146,500 for heads of household
  • $109,000 for all others

How Will I Know If Money Has Been Deposited Into My Bank Account?

The IRS stated that it will send letters to EIP recipients about the payment within 15 days after they are made. A letter will be sent to a recipient’s last known address and will provide information on how the payment was made and how to report any failure to receive it.

Is There A Way To Check On The Status Of A Payment?

The IRS has introduced a new ‘Get My Payment’ web-based tool that will show taxpayers: their EIP amount and the scheduled delivery date by direct deposit or paper check or that a payment has not been scheduled. It also allows taxpayers who did not use direct deposit on their last-filed return to provide bank account information. To use the tool, you must enter information such as your Social Security number and birthdate. You can access it here.

I Tried The Tool And Got The Message, “Payment Status Not Available.” Why?

Many people report they are getting this message. The IRS states there are many reasons why you may see this. For example, you are not eligible for a payment or you are required to file a tax return and have yet to file. In some cases, people are eligible but are still getting this message. Hopefully, the IRS will have it running seamlessly soon.