Economic Impact Payments are a stimulus rolled out by the Internal Revenue Service (IRS) to offer financial relief to those affected by the coronavirus outbreak.
Eligible taxpayers may get up to $1,200 for individuals, and up to $2,400 for those married filing jointly. Additionally, they may receive $500 for every qualifying child (you can use this chart to check how much you should receive)
However, some people are finding that their Economic Impact Payment is smaller than expected. Below you will find the reasons why.
You Haven’t Filed a 2019 Tax Return
The amount of your Economic Impact Payment is based on your most recent tax return. So, if you haven’t filed a return for 2019, your payment will be based on information from 2018. Alternatively, it’s also possible that the IRS has not finished processing your 2019 return yet.
The Qualifying Child Is Not Under the Age of 17
In order to qualify for the additional $500, the qualifying child must be under the age of 17 at the end of the year for the tax return on which the IRS bases the payment. If a dependent is 17 or older (including other relatives and college students), they don’t qualify for this additional amount.
Your Payment Was Offset by Past-Due Child Support
This is the only offset that can affect the amount of your payment, since federal law allows creditors to garnish a payment once it’s deposited into a bank account. If an offset occurs, the Bureau of the Fiscal Service will send you a notice.
What to Do
If you receive an Economic Impact Payment for an amount that is smaller than expected, you can claim the additional credits you qualify for when you file your tax return for 2020.
Get Expert Advice
The IRS’ response to COVID-19 changes constantly, so it’s important to stay updated. You can check the IRS website or this blog. It’s also a good idea to get advice from an expert who can help you get advantage of the relief initiatives unrolled by the government.
At Meadville Tax Services we have the know-how and the drive to assist you so you can file your taxes efficiently, limiting your tax liability while staying compliant with federal tax regulations.