Americans who’ve already filed their 2020 tax returns may be entitled to additional stimulus money as part of special “plus-up” payments available for those who saw their incomes or number of dependents change last year.
However, the IRS is warning people expecting those payments that they may be for less than anticipated, depending on a couple of factors. The “plus-up” payment is determined by the differences between your 2019 and 2020 tax returns - and how different those are changes how much additional money you receive.
For instance, if a single person made $85,000 in 2019, they were not eligible for the third round of stimulus checks that are still being sent out. That’s because the threshold to qualify for a check was $75,000 to receive the full $1,400. If you made between $75,000 and $80,000, your check would be pro-rated by $100 per $1,000 over $75,000 earned.
That means even if your income in 2020 dropped enough to qualify you for a check, it doesn’t mean you’ll receive the full $1,400 if your income was closer to $80,000 than $75,000. So while you may now qualify for a check, it might not be for as much as you expected.
If that same single person earned $72,000 in 2020 and has already filed their 2020 tax returns, the IRS would send them a full $1,400 check. The IRS is also sending out smaller checks if your income dropped from something like $79,500 to $74,000, to make up the few hundred dollar difference of the prorated checks.
The income thresholds for the third stimulus were set at $75,000 for a single person. Single tax payers who earned over $80,000 received nothing. Couples who earned under $150,000 combined were eligible for full checks as well. However, if couples earned more than $160,000 combined, they received nothing.
Another possible problem with the “plus-up” payments revolve around children and dependents.
If you had a child in 2020 and your income level is below the proper threshold, you are also eligible to receive an additional $1,400 check for your dependent. However, if you had a child in 2020 and your income exceeded the threshold, you won’t receive a “plus-up” payment.
With the latest round of stimulus, checks were also issued for dependents who did not previously qualify. In the first two rounds, the cut-off for dependents was 17. The third round granted checks for all dependents regardless of age, as long as they are claimed on your taxes.
That means tax payers who now qualify for the regular stimulus checks and who also have dependents listed on their 2020 tax returns -- such as college students or adults the tax payer cares for -- could see additional checks sent their way.
However, if multiple people claim the same dependent on their 2020 taxes, the IRS says it can complicate the matter and cause a delay in payments. This is especially true in cases of divorce where only one parent can claim a dependent on a return, but the parents may switch back and forth year to year on who claims the dependent.
On Wednesday, the IRS sent out more than 25 million stimulus payments, which included more than one million “plus-up” payments. Those “plus-up” payments were worth more than $2 billion, the agency reported.
Those who qualify for a “plus-up” payment do not need to do anything other than file their 2020 taxes. The IRS will continue to send out those payments as they process the 2020 taxes.
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‘Plus-up’ stimulus payments may not be worth as much as you expect, here’s why - MLive.com
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