WASHINGTON – The IRS and Treasury said they have successfully delivered nearly 130 million economic impact payments to Americans in less than a month, with more on the way.
But some Americans may have received a different payment amount than they expected. The payment amount varies based on income, tax filing status, and family size.
Here are the possible common reasons or scenarios that may explain why you received a different payment amount than expected:
You have not filed a 2019 tax return, or the IRS has not finished processing your 2019 return
Payments are automatic for eligible individuals who filed a 2018 or 2019 tax return. Generally, the IRS uses the information from the 2019 tax return to calculate the economic impact payment.
Instead, the IRS will use the 2018 return if the taxpayer has not yet filed for 2019. If a taxpayer has already filed for 2019, the agency will continue to use the 2018 return if the IRS has not finished processing the 2019 return.
Remember, accepting a tax return electronically by the IRS is different from completing the processing; Any issues with the 2019 return means the IRS would use the 2018 filing.
If the IRS used the 2018 return, various changes in your life in 2019 would not be reflected in the payment. These may include higher or lower income or the birth or adoption of a child.
In many cases, however, these taxpayers can claim an additional amount on the 2020 tax return they will file next year. This could include up to an additional $ 500 for each qualifying child that is not reflected in your financial impact payment.
Claimed dependents are not eligible for an additional payment of $ 500
Only children eligible for the child tax credit qualify for the additional payment of up to $ 500 per child. To claim the child tax credit, the child generally must be related to the taxpayer, live with him for more than half the year, and provide at least half of his support.
In addition to your own children, adopted children, foster children (placed in your home by a licensed placement agency), eligible children may include the taxpayer’s younger siblings, grandchildren, nieces and nephews if they can be claimed as dependents.
Additionally, any qualifying child must be a US citizen, permanent resident, or other qualified resident alien. The child must also be under the age of 17 on the last day of the year of the tax return on which the IRS bases the payment determination.
A qualifying child must have a valid Social Security number (SSN) or Adoptive Taxpayer Identification Number (ATIN). A child with a Taxpayer Adoption Identification Number (ITIN) is not eligible for an additional payment.
Parents who are not married to each other and do not file a joint return cannot both claim their qualifying child as a dependent. The parent who claimed their child in their 2019 return may have received an additional economic impact payment for their qualifying child.
When the parent who did not receive an additional payment files their 2020 tax return next year, they can claim up to an additional $ 500 per child on that return if they qualify to claim the child as their 2020 qualifying child.
Dependents are university students
Under the CARES Act, dependent college students do not qualify for Economic Impact Payment (EIP), and although their parents may claim them as dependents, they normally do not qualify for the additional payment of $ 500.
For example, under the law, a 20-year-old full-time college student claimed as a dependent on his mother’s 2019 federal income tax return is not eligible for a $ 1,200 economic impact payment.
Additionally, the student’s mother will not receive an additional $ 500 financial impact payment for the student because she does not qualify as a child under the age of 17. This scenario could also apply if a parent’s 2019 tax return has not yet been processed by the IRS before payments were calculated, and a college student was claimed on a 2018 tax return.
However, if the student cannot be claimed as a dependent by their mother or anyone else by 2020, that student may be eligible to claim a credit of $ 1,200 on their 2020 tax return next year.
Claimed dependents are parents or relatives, over 17 years
If a dependent is 17 years of age or older, they do not qualify for the additional payment of $ 500. If a taxpayer claimed a parent or any other relative age 17 or older on their tax return, that dependent will not receive a payment of $ 1,200. Additionally, the taxpayer will not receive the additional payment of $ 500 because the parent or other relative is not a qualifying child under the age of 17.
However, if the parent or other relative cannot be claimed as a dependent on the tax return or any other person by 2020, the parent or relative may be eligible to individually claim a credit of $ 1,200 on their submitted 2020 tax return next year.
Overdue child support reduced the payment as compensation
The economic impact payment can only be affected by past due child support. The Fiscal Service Office will send the taxpayer a notice if that action occurs.
For married taxpayers filing jointly and filing an injured spouse claim with their 2019 tax return (or 2018 tax return if they have not filed their 2019 tax return), half of the total payment will be sent to each spouse. Only the payment of the spouse owing past due child support will be reduced as compensation.
The IRS is aware that, in some cases, a portion of the payment sent to a spouse who filed an injured spouse claim with their 2019 tax return (or 2018 tax return if no tax return has been filed). 2019 taxes) has been affected by an expired alimony of the spouse owed by child support.
The IRS works with the Office of Fiscal Services and the Office of Child Support Enforcement of the US Department of Health and Human Services. USA to solve this problem as quickly as possible.
If you filed an injured spouse claim with your return and are affected by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the problem is resolved. “We apologize for any inconvenience this may have caused,” said the IRS.
Seizures of goods reduced the amount of the payment
Federal tax refunds, including economic impact payment, are not protected from the lien against federal property once the payments are deposited into a taxpayer’s bank account.
What if the amount of my financial impact payment is incorrect?
Everyone should review the eligibility requirements for their family to make sure they meet the criteria.
In many cases, eligible taxpayers who received a lower-than-expected economic impact payment may qualify to receive an additional amount early next year when they file their 2020 federal tax return. The EIP is technically an advance payment of a new Temporary tax credit that eligible taxpayers can claim on their 2020 return.
Everyone should keep the letter they receive in the mail for their records within a few weeks after their 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 IRS will provide more details on IRS.gov about the action you may need to take.
The economic impact payment will not reduce a taxpayer’s refund or increase the amount you owe when you file a tax return early next year. It is also not taxable and therefore should not be included in the income of a 2020 return.
This information is a translation of the original published in English on the IRS website.