You May Get Supplemental Payment to Your Stimulus Check
So far, millions of people have received their stimulus checks, but many got less than what they were eligible for on the basis of their 2020 tax return.
The IRS started sending out the third round of stimulus checks in March. So far, millions of people have received their stimulus checks, but many got a payment less than what they were eligible for on the basis of their 2020 tax return. To such people, who have already got the third coronavirus stimulus check, the IRS is now sending them the balance payment in the form of supplemental or “plus-up" payments.
Coronavirus stimulus check: What is supplemental or plus-up payment?
When the IRS started sending the third coronavirus stimulus checks of up to $1,400 in March, it hadn’t processed many 2020 tax returns yet. This meant that people who would have qualified for more money on the basis of their 2020 tax return got less stimulus money as the IRS had used their 2019 return.
Normally, such people need to wait for a year to claim the balance of their stimulus payment in the form of a recovery rebate credit, when they file their tax return next year. However, the IRS last month said that such people do not need wait to get their balance payment.
According to the IRS, the plus-up payment is “the first of ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns.”
Many people have already got this supplemental or “plus-up" payment. Such payment is being sent to people on an ongoing basis if they are eligible for more money on the basis of their 2020 AGI (adjusted gross income), or if they had a new child or dependent.
Who gets supplemental or “plus-up" payments?
Talking about who gets this supplemental payment, the IRS says these payments cover a situation “where a person’s income dropped in 2020 compared to 2019, or a person had a new child or dependent on their 2020 tax return, and other situations.”
For instance, an individual taxpayer had an AGI of $85,000 in 2019, but it dropped to $65,000 in 2020. He wouldn’t be eligible for a payment in the third round depending on the 2019 AGI, but would qualify for full payment on the basis of the 2020 tax return.
The IRS has extended the tax filing deadline to May 17. However, it is recommended that you file your 2020 return as soon as possible to get the supplemental payment.
Separately, eligible people can now also claim the balance from the first two rounds of stimulus payments by way of the Recovery Rebate Credit. Also, the IRS confirmed that it has now started sending payments to the Social Security and other federal beneficiaries, who didn’t file a 2019 or 2020 tax return. The majority of these people would get the payment electronically by April 7.