Anthony, Here Are Your Articles for Wednesday, March 24, 2021
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IRS Offers More Details on Relief Bill

 

The latest relief bill—the American Rescue Plan Act—is the size of a long novel, so it will take some time to get the full scope. The IRS has started to issue guidance, which provides help in understanding key provisions, but does not contradict what has been widely published so far about the act.

Who is eligible?

The IRS notes that generally, if you are a U.S. citizen or U.S. resident alien, you are eligible for the full amount of the third Economic Impact Payment if you (and your spouse if filing a joint return) are not a dependent of another taxpayer and have a valid Social Security number (see exception when married filing jointly) and your adjusted gross income does not exceed:

  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower.
  • $112,500 if filing as head of household.
  • $75,000 for eligible individuals using any other filing statuses, such as single filers and married people filing separate returns.

Payments will be phased out – or reduced -- above those AGI amounts. This means taxpayers will not receive a third payment if their AGI exceeds:

  • $160,000 if married and filing a joint return or if filing as a qualifying widow or widower.
  • $120,000 if filing as head of household.
  • $80,000 for eligible individuals using other filing statuses, such as single filers and married people filing separate returns.

For example, according to the IRS, a single person with no dependents and an AGI of $77,500 will normally get a $700 payment (half the full amount). A married couple with two dependents and an AGI of $155,000 will generally get a payment of $2,800 (again, half the full amount).

Eligibility and filing

Most eligible people will get the third Economic Impact Payment automatically and won't need to take additional action. The IRS will use available information to determine eligibility and issue the third payment to eligible people who:

  • Filed a 2020 tax return.
  • Filed a 2019 tax return if the 2020 return has not been submitted or processed yet.
  • Did not file a 2020 or 2019 tax return but registered for the first Economic Impact Payment using the special Non-Filers portal last year.
  • Are federal benefit recipients as of December 31, 2020, who do not usually file a tax return and received Social Security and Railroad Retirement Board benefits, Supplemental Security Income (SSI) and Veteran benefit recipients in 2020. The IRS is working with these agencies to get updated information for 2021 to assist with stimulus payments at a date to be determined.

Those expecting a payment can go to Get My Payment to find out when they should see the money. The IRS also has additional guidance for special circumstances. Or call us if you have any questions about your situation.

 

 

 

 
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