This year’s extended tax day deadline of May 17 has now come and gone, and with it for those people eligible for important COVID-relief benefits tied to the filing of 2020 tax returns to take advantage of them. The deadline was also important for anybody who still has not received a third-round stimulus payment of up to $1,400.
The IRS has been working diligently over the past few months to distribute these payments, having sent out more than 165 million of them to eligible Americans with a total value of over $388 billion. Between the payments included in the current round and those in the first two rounds of payments worth $1,200 and $600, respectively, the IRS has now sent out roughly 472 million stimulus payments to Americans with a total value of over $800 billion, according to recent testimony by IRS Commissioner Charles Rettig. The IRS is now likely approaching the end of its campaign to distribute the payments.
Those who have still not yet received a third-round stimulus payment, or who have not received all of the money that they are eligible for, most likely have not done so because of the status of their 2020 tax returns.
Recently, the IRS has shifted its focus with regards to the distribution of stimulus payments to sending payments to those people whose payments are dependent on the processing of their 2020 tax returns. This includes sending payments to people about whom the IRS did not have sufficient information, such as people who do not normally file tax returns but who did file 2020 returns in order to receive their payments, and those people who are eligible for an additional payment in the form of what the IRS calls “plus-up” payments. These supplemental payments are designed for people whose eligibility for a payment was initially based on information in their 2019 tax returns, but whose 2020 returns indicate a loss of income that entitles them to more money.
Those people who fall into one of these categories who did file their 2020 tax return before the deadline, but who still have not received their payments, will likely receive them in the next few weeks. The IRS was faced with a large backlog of unprocessed tax returns in the days leading up to the deadline, and the agency may simply have not yet gotten around to processing some returns and payments.
Those waiting for payments can take steps to track the status of their payments.
Those people who fall into one of the above categories that did not file their 2020 tax returns prior to the deadline should still do so. Any missing stimulus money can be claimed up until October 15, and you may not need to pay a late filing fee if you are owed money back by the IRS in the form of a tax refund; those with a balance due, however, will need to pay interest and penalties on late payments, so it is recommended that people file their returns as soon as possible.