The Internal Revenue Service and the Treasury Department said Tuesday evening that they are beginning to make direct deposits of the second round of economic impact payments as soon as Tuesday night for some taxpayers and will continue doing so through next week. They will start mailing out paper checks on Wednesday to taxpayers who don’t have their direct deposit information on file.
The rollout of the checks, which will amount to $600 for single taxpayers and $1,200 for married couples and $600 for each additional child, comes after President Trump signed the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 on Sunday after a last-minute demand that Congress raise the $600 amount to $2,000. The House voted Monday to pass separate legislation known as the CASH Act that would raise the amount to $2,000, but it was blocked in the Senate by Majority Leader Mitch McConnell, R-Kentucky.
Meanwhile, the Treasury Department and the IRS are moving forward with the stimulus payments. “Economic impact payments to eligible Americans and their families,” said Treasury Secretary Steven T. Mnuchin in a statement. “These payments are an integral part of our commitment to providing vital additional economic relief to the American people during this unprecedented time.”
Taxpayers who have adjusted gross income for 2019 of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses will receive the full amount of the payment. For filers with income above those amounts, the payment amount will be reduced.
House Ways and Means Committee Chairman Richard E. Neal, D-Massachusetts, denounced McConnell for blocking approval of the CASH Act and instead introducing different legislation Tuesday that combines the $2,000 checks with unrelated provisions regarding internet policy and elections, which Trump had also demanded.
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Tim Long is a Managing Director in Financial Services. He has deep knowledge of financial services regulation with hands on experience in all bank supervision and policy related matters. He retired from the OCC after a 31 year career in which he oversaw virtually all of the agencys bank supervision and policy units. He has extensive experience in large and complex bank supervision, regional financial institutions and community banking. In his most recent role with the OCC, Tim served as Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner. He was a key advisor to the Comptroller and a member of the OCCs Executive Committee. Tim was also a key advisor to the U.S. Department of the Treasury during the recent financial crisis. He served as the Regulatory Council chair of the Troubled Asset Relief Program (TARP) Capital Purchase Program and was a member of the Financial Stability Oversight Council Deputies Committee created under the Dodd-Frank Act. Earlier in his tenure with the OCC, Tim also held the positions of Senior Deputy Comptroller for Midsize/Community Bank Supervision and Deputy Comptroller for Large Bank Supervision, and was the examiner-in-charge of several large, complex national banks.
“Senator McConnell easily could have held a vote on the CASH Act today,” Neal said in a statement. “Instead, he blocked Senate Democrats’ attempt to pass the measure and is combining the $2,000 payments with policies that have nothing to do with providing relief to families. This unwieldy Frankenstein bill serves no purpose but to make it even less likely that the House-approved aid reaches Americans in need.”
As with the first round of payments under the CARES Act, most recipients will receive the stimulus payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.
The IRS said that anyone who received the first round of payments earlier this year but didn’t get a payment by direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will end in January. If additional legislation is enacted to provide for an additional amount, the economic impact payments that have been issued will be topped up as quickly as possible.
Eligible individuals who didn’t receive a stimulus payment this year — either the first or the second payment — will be able to claim it when they file their 2020 taxes in 2021. The IRS is urging taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the economic impact payments, or EIPs, referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.
Payments will be automatic for any eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments will also be automatic for anybody who managed to successfully register for the original stimulus payment online at IRS.gov using the agency’s Non-Filers tool by Nov. 21, 2020 or who submitted a simplified tax return that's been processed by the IRS.
“Throughout this challenging year, the IRS has worked around the clock to provide economic impact payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig in a statement. “We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.”
One snag for many young taxpayers is that if they’re being claimed as a dependent on their parents’ tax returns, they won’t be able to receive a stimulus payment. That will affect many young people who were forced to move back in with their parents or are being supported by them as a result of the economic fallout from the pandemic. Generally, U.S. citizens and resident aliens who aren’t eligible to be claimed as a dependent on someone else’s income tax return will be eligible for the stimulus payment.
