Check Your Bank Account: IRS Sends Out 2.2 Million More Stimulus Payments
The initial stimulus checks were based on information from 2019, which did not accurately reflect many family situations.
The Internal Revenue Service has had a busy month. After sending out the first of six monthly Child Tax Credit checks to more than 36 million American households last week, the agency distributed an additional 2.2 million payments of $1,400 apiece from the stimulus legislation approved in the March 2021 American Rescue Plan Act. The tax collection agency has now sent out more than 170 million payments, around 9 million of which were sent in the first three weeks of July. Roughly $400 billion of the $450 billion set aside for stimulus checks has been distributed to date.
Of these payments, 1.3 million were sent to people who filed their 2020 tax returns late in May and were not in the IRS’s database before they did so. Consequently, the IRS was only able to send these stimulus checks once the recipients’ tax returns had been processed—and the agency has a backlog of roughly thirty-five million tax returns remaining to be processed in the weeks ahead.
The remaining 900,000 checks were “plus-up” payments or supplementary payments for stimulus check recipients who were not sent all the benefits they were eligible for. Because the payments were initially sent out in March, and many households did not file their 2020 tax returns until May, the initial stimulus checks were based on information from 2019, which did not accurately reflect many family situations. For instance, many Americans had children during 2020, qualifying them for additional payments of $1,400 each.
To qualify for the stimulus payments, individuals must have made $75,000 or less per year and spouses filing jointly must have made less than $150,000. As a recipient’s income exceeds this level, the stimulus benefit sharply decreases; after an individual or family income reaches $80,000 or $160,000, the payments are cut off entirely.
Thus, the IRS looks at both a recipient’s 2019 tax returns for eligibility if those were on file when the agency’s initial evaluation was made. This means that if a person made more money in 2020 than in 2019, then they are still probably eligible for the payment. The trend for most Americans, however, appears to be the other way around.
The IRS has indicated that roughly 90 percent of eligible stimulus check recipients have already received their checks. In addition to sending out the Child Tax Credit payments and processing tax returns, the agency has indicated that it will continue to send out additional stimulus payments throughout the summer.
Trevor Filseth is a current and foreign affairs writer for the National Interest.