The second set of Economic Impact Payments are already showing up in eligible Americans’ bank accounts, but some may encounter problems with their direct payment. Rather than picking up the phone, the Internal Revenue Service today advised taxpayers to instead visit the IRS website for answers since “IRS phone assistors do not have additional information beyond what’s on IRS.gov.”
As with the CARES Act-provided Economic Impact Payments, the IRS expects there could be some confusion with the latest direct payments issued by the Treasury Department and IRS. From unavailable funds to less-than-anticipated payouts, the agency aims to set expectations and answer as many questions as possible at this early stage in the process.
“The direct deposit payments may take several days to post to individual accounts,” the IRS says. “Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of January 4, 2021, which is the official date funds are available.”
That particular issue should have worked itself out for the earliest direct-deposit recipients, but those who are expecting paper checks won’t have the luxury of receiving a real-time alert from a mobile banking app when the check arrives in their mailbox. That’s why those recipients will need to regularly check the Get My Payment online tool and keep a close eye on their mailbox.
(Note: While distribution of checks began on December 30, the IRS expects to take until at least the middle of January to finish sending EIPs—and it could take even longer for eligible individuals living overseas.)
What if I don’t receive an Economic Impact Payment?
Economic Impact Payment-eligible Americans who receive a smaller-than-expected payment—or no payment at all—can claim the Recovery Rebate Credit on their tax year 2020 return. Since this credit covers both EIPs that were authorized in 2020, it helps ensure that all eligible Americans eventually get the financial relief they’re due.
“Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active,” the IRS explains. “By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active. While the IRS is exploring options to correct these payments, if you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return.”
Where can I find more information about Economic Impact Payments?
Aside from the Get My Payments tool, the IRS says the following webpages contain important information about coronavirus tax relief:
Source: IR-2021-01
MEA Tax Advisors