The Internal Revenue Service and the Treasury have recently announced successfully delivering 130 million Economic Impact Payments and more on their way.
We are sure there must be some of you who have received a different amount than what was expected. Well, you are not alone, and this calls for unveiling the various reasons why this might have happened. Let’s take a look.
1. Your family or financial situation has changed.
If you recently got married or had a baby or switched a job, then there is a possibility that the IRS does not have an updated record. This would affect your Economic Impact Payment if these changes have happened in 2020 or 2019, and IRS has referred to your 2018 returns for processing the EIP.
2. Your dependent didn’t have a Social Security Number.
Your dependents should have a valid Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN) for processing the EIP. Whereas, if your dependent has an Individual Taxpayer Identification Number (ITIN), then they would not be eligible for the Economic Impact Payment. Additionally, your dependent is also supposed to be a U.S. National, Permanent Citizen, or a Resident Alien to avail this support.
3. Your ex or your spouse claimed the child.
If you are an unmarried couple who do not file a joint return, then only one of you can claim the dependent on your return. According to the IRS, either of parents or divorced parents who claimed the dependent on their 2019 would receive the additional EIP stimulus amount of $500.
4. Past-due child support gets deducted from the payment.
Another reason why your stimulus check was offset could be past due child support costs. Say, for example, you are married and file jointly, but this time you also filed an injured spouse claim on your 2019 tax returns (or 2018 returns in case of non-filing of 2019), then half of the payment is sent to each spouse. In this case, only the spouse whose past child support was due would be offset.
However, there are chances that the portion of the payment delivered to the spouse who filed an injured spouse claim with their 2018 or 2019 returns may have been offset by mistake for the injured spouse’s child support dues.
The IRS is aware of this issue and is taking steps to avoid such errors while processing the EIPs. If you are one of those impacted by this situation, then you need not worry because the IRS will rectify the same mistake.
5. Garnishments by creditors reduced the payment amount.
A point that might have been missed by many is that while there is no mechanism for offsets apart from Child Support for EIP. There are chances that the Economic Impact Payment gets credited to your account but gets automatically deducted by creditors whose payments were due and until now used to be automatically deducted from your bank account.
The Bottom Line
It’s good to see that the Economic Impact Payments are reaching their rightful owners when they most need it. There is nothing to worry about if there is an error in the amount received by you. You can always rectify it when you file your next tax return. There are many initiatives for support coming up, and as the MyTaxFiler team always insists, be active, vigilant, and updated with the latest information.
If, in case, there is more you need to know, then feel free to contact your MyTaxFiler expert at C19Grants@mytaxfiler.com.
Published on 5/19/2020