Onvio Pay Bills

Phone: 907-272-2041 
Fax: 907-272-6241

IRS begins delivering second round of Economic Impact Payments

December 31, 2020

Article provided by Thomson Reuters

IR 2020-280, 12/29/2020
In a December 29 News Release, IRS announced that it had begun delivering a second round of Economic Impact Payments (EIPs) via direct deposit that evening and would begin mailing paper check EIPs on December 30. The requirement to make the EIPs was contained in recently-enacted legislation. The News Release also provided other information about the EIPs.
Background. As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, PL 116-136) that was enacted earlier in 2020, IRS made EIPs to eligible taxpayers. (Code Sec. 6428(a))
The Consolidated Appropriations Act, 2021, which was signed into law by President Trump on December 27, 2020, contains a second round of EIPs. Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an EIP of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Single persons with adjusted gross income for 2019 up to $75,000, and married couples filing joint returns and surviving spouses with 2019 adjusted gross income up to $150,000, will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced. (Code Sec. 6428A) For additional detail as to who qualifies for the new EIP and the amount of the EIP, see Individual provisions of the CAA, 2021.
Second round of payments. IRS has announced that it began delivering the second round of EIPs via direct deposit on December 29 and would begin mailing paper checks on December 30.
Direct deposits will arrive as early as December 29 and will continue into the week that begins on January 3.
Payments are automatic for eligible taxpayers. Payments are automatic for eligible taxpayers who filed a 2019 tax return, and for those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries, who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by Nov. 21, 2020 or who submitted a simplified tax return that has been processed by IRS.
IRS notes that there is no action required by eligible individuals to receive this second payment and asks taxpayers who are due to receive automatic payments to not contact their financial institutions or IRS with payment timing questions.
Methods of delivering the payments. As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. Social Security and other beneficiaries who received the first round of payments via Direct Express will receive this second payment the same way.
Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will conclude in January.
People who don't receive a direct deposit by early January should watch their mail for either a paper check or a debit card. To speed delivery of the payments to reach as many people as soon as possible, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card. The form of payment for the second mailed EIP may be different than for the first mailed EIP. Some people who received a paper check last time might receive a debit card this time, and some people who received a debit card last time may receive a paper check.
IRS notification of payment. People will receive an IRS notice, or letter, after they receive a payment; the notice or letter will tell them the amount of their payment. They should keep this for their tax records.
Credit available to certain persons who didn't receive an EIP. Eligible individuals who did not receive an EIP this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021. IRS urges taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the EIP referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.
Possibility of additional amount of EIP. IRS notes that if additional legislation is enacted to provide for an additional amount, the EIPs that have been issued will be 'topped up' as quickly as possible.
Reference: For information on EIPs, see FTC 2d/FIN ¶ A-4465.