The IRS may send you too much economic stimulus money, not enough or forget you entirely. Here’s how to get econ stim mistakes made by the IRS corrected.
The first two economic stimulus payments ($1200/$500 and $600) were sent out based on your tax returns filed for 2018 or 2019. If your circumstances changed when you file your 2020 tax return, you may need to take action.
What if You Got a Check In Error?
The government determines who is and isn’t eligible to receive a stimulus check based on several factors. If you fall into any of these categories and received a stimulus check, it was likely by error:
You received a check for someone who has died
You don’t have a Social Security number.
You’re considered a “nonresident alien” without a US citizen spouse. (Rules did change regarding this for the 3 different stimulus payments.)
You’re a noncitizen who files federal taxes.
Your adjusted gross income exceeds the limit
You’re claimed as a dependent on someone else’s taxes (This applies to the first and second checks).
Can You Keep the Stimulus Money For Someone Who’s Died?
If you received a payment for someone who died in 2019 or earlier, the IRS says you should return the entire payment “unless it was made to joint filers and one spouse is still living.” If you’re the living spouse, you should return half the payment.
However, if the check is issued in both your name and your deceased spouse’s name (and therefore you can’t deposit the money), you’ll need to return the whole amount to the IRS. After the agency processes the returned payment, it will issue a new check with the correct amount for you.
How To Return a Payment You Already Deposited
1. Use a personal check or money order and make the check payable to the US Treasury. You’ll also need to write “2020 EIP” and include the taxpayer identification number or Social Security number of the person whose name is on the check.
2. On a separate piece of paper, let the IRS know why you’re sending the check back.
3. Mail the check with return receipt requested so you can track the mailing. You will need to mail it to the assigned IRS location for the home state of the econ stim recipient.
What If Your Ex-Spouse Received the Payment and It Was Due You?
The IRS used either your 2018 or 2019 return to determine where a dependent was listed. If you have an agreement that changes each year, it’s possible one spouse received the payments when they may not have been due to get it according to the terms of the divorce.
What then? The IRS has said it’s a matter for your and your attorneys. In other words, they leave it to you to work it out.
What If You Didn’t Get Your Econ Stim Money?
More than 100 million people never received the second stimulus payment. More received the first stimulus payment, but there were some that missed that as well. If you didn’t receive your payment you will need to claim it as a Recovery Credit Rebate on your 2020 taxes. This is true even if you don’t usually file a tax return.
Make sure you include your electronic bank information. Otherwise, you will be waiting a lot longer for a paper check or prepaid card from the IRS for the third economic stimulus payment.
Keep up to date on the latest from the American Rescue Plan Act at Diane Kennedy’s Tax Group https://www.facebook.com/groups/DianeKennedysUSTaxGroup