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Recent Tax Updates

Third Round of Economic Stimulus Payments

The Treasury Department has sent out the first batch of the 3rd round of economic impact (stimulus) payments to individuals. Most taxpayers that included direct deposit information on their 2020 or 2019 federal return should see these payments deposited to their bank accounts by this Wednesday, March 17, 2021. Some taxpayers will see the payments being direct deposited as pending or as provisional payments in their accounts before the official payment date of March 17.

Some payments that will be distributed as a check will begin to go out this week. Most of the check disbursements will be going out beginning next week and will continue for the next several weeks until they are all distributed.

To receive an economic impact (stimulus) payment an individual must:

  • Have a valid Social Security Number
  • Filed a 2020 or 2019 federal tax return (if the 2020 return has not been submitted or processed yet)

Social Security and other federal beneficiaries are the only exception to the requirement to have filed a 2020 or 2019 federal tax return.

Stimulus Payment Amount

  • $1,400 for each eligible individual ($2,800 for Married couples)
  • $1,400 for each dependent claimed on the taxpayer’s federal return

How Stimulus Payments will be distributed
The stimulus payments will be direct deposited to an individual’s account based on the direct deposit information that was included on their 2020 or 2019 federal tax return if they have not filed their 2020 return by the time the payment is released.

If direct deposit information was not included on their federal return the stimulus payment will be mailed as a check based on the address that was included on their 2020 or 2019 federal return.

Individuals Who Received Social Security, Railroad Retirement or VA Benefits
Individuals who received Social Security benefits, Railroad Retirement benefits, Supplemental Security Income, or VA benefits and did not file a 2020 or 2019 federal return will receive the 3rd economic impact (stimulus) payment automatically in the same manner that they receive one of these benefits. The timing of when they will receive the 3rd stimulus payment is still to be determined and will be announced in the near future.

Stimulus Phase-Out Ranges
Reminder that the 3rd stimulus payment amount begins to be reduced when an individual’s AGI reaches the following:

  • $75,000 for single filers (reduced to zero with income over $80,000)
  • $150,000 for married filing joint filers (reduced to zero with income over $160,000)
  • $112,500 for Head of household filers (reduced to zero with income over $120,000)

Checking Payment Status
Individuals may check the status of their third stimulus payment by accessing the IRS Get My Payment tool on the IRS website.

This tool is only for checking the status of the payment.

An individual will NOT be able to add bank account information or file a simple return as they were able to do with the first EIP payments in 2020.

For more details see the following on the IRS website:

Mark Castro, CPA

Mark Castro, CPA

Mark has been with CrossLink Professional Tax Solutions (CPTS) since 2008, but has been in the tax industry since 1990. As the government/tax industry liaison for CPTS, Mark has been very active in working with the IRS, States, and other tax industry members to help improve communications, promote standardization, and simplification of eFile systems. Mark has also been active with industry associations as a board member of the National Association of Computerized Processors (NACTP) and the Council of Electronic Revenue Communication Advancement (CERCA) for many years. These two associations work with the IRS and States to help solve key eFile and electronic tax system issues and work to improve the operations of the State and IRS eFile systems.

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