The Second Stimulus Payment is Happening

You heard right – a second stimulus payout is on the way. Late on Dec. 27, President Trump signed the massive COVID-19 relief and government spending bill, which includes a second round of stimulus payments to eligible individuals across the country.

Woman looks at her second stimulus payment in her bank account.

To help bring you quickly up to speed, here’s a basic breakdown of the payments.

The important details you want to know

  • The second round of stimulus payments are based on the information reported on your 2019 tax return.
  • Currently, the second stimulus payout is as follows for those eligible:
    • $600 per individual
    • $1,200 per couple
    • $600 per child under the age of 17

*Another COVID-19 relief bill with additional stimulus money is being discussed by Congress but has yet to be passed. Continue to check back here for the most up-to-date information.

  • Income qualifications for receiving the second payment are similar to the first round. You will receive the full amount if you are:
    • An individual earning less than $75,000 per year
    • A couple earning less than $150,000 per year as a couple

If your Adjusted Gross Income (AGI) is more than those amounts, your stimulus payment will be reduced by $5 for each $100 over the limit. It completely phases out if:

  • You earn more than $99,000 as a single taxpayer
  • You earn more than $136,500 as Head of Household
  • You earn more than $198,000 as joint filers with no kids

ProTip: Your adjusted gross income includes income like wages, salaries, or interest minus adjustments for specific deductions like student loan interest or retirement contributions. Check line 8b of your 2019 Form 1040 to locate your AGI.

The answers to even more commonly asked questions

How does the stimulus payment impact my tax return again?

The stimulus payment is an advance on a tax credit for your 2020 federal tax return. Since 2020 returns are not yet filed, the IRS uses your 2019 return to determine how much money you qualify to receive.

You may get additional money once you file your 2020 return if your situation is different than what was reported on your 2019 return.

For an additional explanation on how the stimulus payments work, check out the blog post .

Is this payment taxable?

No. Like the first stimulus payment, the legislation in this bill states the payment is not taxable. It is an advance on a tax credit associated with your 2020 tax return.

What’s the difference between the stimulus payment, Economic Impact Payment, and the Recovery Rebate?

Nothing. They all mean the same thing. The IRS changed the way they referenced the payments a few times throughout 2020, creating multiple names for the same payment. 

When will I receive my money?

Language in the bill states the money must be sent to recipients by Jan. 15, 2021. If you do not receive your payment by that date, you will need to claim the amount you’re owed as a “recovery rebate” on your 2020 federal income tax return.

How do I check the status of my payment?

Currently, the details on how you can check the status of your payment.

Can I change my direct deposit information?

Unfortunately, the IRS’ Get My Payment tool (previously designed for individuals to update their banking information to receive their first stimulus payment) is unavailable. That means you’ll receive the money in the most recent bank account the IRS has on file for you.

Currently, the IRS has not issued any guidance on what will happen if you no longer have access to that bank account. We hope to learn how they plan to manage or reissue those payments soon.

Will I get my second stimulus payment on the debit card I previously received?

No. The IRS is not reloading money to the cards issued with the first stimulus payment. If you are set to receive a card again, you’ll receive a new one.

What if my circumstances changed since the first stimulus payment?

When you file your 2020 tax return, you can indicate changes to your income, filing status, or dependent information. That information will help determine how much you qualify to receive in a stimulus payment. Therefore, if you are eligible for more than you initially receive, the information reported on your return will influence whether you receive additional funds.

Fortunately, TaxAct makes that process easy by asking questions to quickly gather the information needed to accurately calculate the amount of money you are eligible to receive. The product will let you know if you are owed more or if you received the right .

I receive social security retirement, disability, railroad retirement, VA or SSI income. Will I receive a payment again?

Yes. Like the first round, you qualify to receive a payment. The IRS will use the information from Form SSA-1099, Form RRB-1099, or the Veterans Administration to generate your stimulus payment.

My spouse doesn’t have an SSN, do we qualify to receive a payment?

Yes, the stimulus payment is available to people who have an SSN but are married to someone who does not.

This new bill expanded the eligibility for stimulus payments to include mixed-status households. That means households with different immigration and citizenship statuses may receive a payment. In fact, that expansion may be retroactive as well, meaning some individuals who were ineligible for the first round of stimulus payments may now qualify to receive that money.

If you think you may now qualify to receive a payment from the first round, TaxAct will help you accurately calculate and claim the recovery rebate as a credit on your 2020 tax return. You’ll then receive any money you qualify for as a tax refund.

What if my spouse passed away in 2019, but I filed Married Filing Jointly for 2019?

In that scenario, only you and any qualifying children will receive the second stimulus payment. You will not receive one for your spouse.

Is more relief coming?

No one really knows. President Trump called for additional stimulus money upon signing the latest COVID-19 relief bill. On Monday, Dec. 28, the House voted to increase the second round of stimulus payments to $2,000, but the Senate has yet to vote on the increase. The Senate majority leader has also not indicated whether the Senate plans to vote on it.

Therefore, as of now, the information stated above are the confirmed details of the bill. As additional information becomes available, we’ll update this page. 

How will TaxAct help me report my payment?

The process is simple. Once you start your 2020 tax return, you’ll be prompted during the filing process to enter information related to your stimulus payments. If you received both payments by the time you file, you will simply enter those dollar amounts, and the product will determine whether you received the right amount. If you’re owed more, the extra funds will be added as a credit to your tax refund.

If you have not received your second stimulus payment by the time you file, TaxAct will ask you a few qualifying questions to accurately calculate the amount you should receive and appropriately report it on your tax return.

The post The Second Stimulus Payment is Happening appeared first on TaxAct Blog.



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