A New 'Stimulus Check Program' Is Dropping Real Money Into Americans Wallets

Income Tax

A New 'Stimulus Check Program' Is Dropping Real Money Into Americans Wallets

No one likes to file their income taxes, but giving the IRS updated information could qualify you for a small, additional payment if your previous stimulus was not the full amount.

Key point: The IRS sent out stimulus payments based on older, 2019 tax returns. However, if you had less income in 2020, filing your taxes now for that year will help ensure the IRS knows to give you the rest of the stimulus.

As part of President Joe Biden’s American Rescue Plan, the IRS has been sending out a third round of stimulus checks since early March. So far, roughly 160 million payments have been made, at a cost of around $380 billion.

As the last of the third stimulus checks are sent out, there is already intense debate over the efficacy of sending a fourth. In general, Democrats support the idea, particularly progressives; a group of House Democrats has endorsed a proposal for a monthly payment of $2000 until the end of the pandemic. By contrast, Republicans, who contest the Senate, have tended to criticize such proposals as grandiose, expensive, and not tailored to suit any particular need.

President Biden has so far avoided the issue of further stimulus. In his joint address to Congress marking his hundredth day in office, he laid out his American Families Plan, an ambitious $2 trillion project designed to benefit working families through universal pre-K education, paid leave, free community college tuition, and increases to the Child Income Tax Credit. However, the president made no mention of a fourth round of stimulus checks.

However, this does not mean that the third round of stimulus checks will be the last payment that many Americans receive. The IRS has also begun to send out “plus-up” payments. So far, roughly 5 million of these supplemental checks have been sent out.

What’s a plus-up payment? The short answer is, it’s a payment to taxpayers who already received their third stimulus checks, but who qualify for additional benefits.

The plus-up payments – actually the seventh “Economic Impact Payment” of the COVID-19 era – came about because the third stimulus check payments were based on the IRS’ 2019 tax returns. As people file their 2020 tax returns, and the IRS reads them, it will emerge that many qualify for benefits that they did not in 2019. For instance, if a person had a child during the pandemic, the IRS would not know that information until they filed their 2020 tax return and included that information – at which point the IRS would send them a plus-up payment.

Therefore, in order to get a plus-up payment, it is vital to send in your 2020 tax return, even if you do not expect a return.

It is also important to remember that these payments might take a while to arrive. The IRS has not issued a time frame for them; it is facing an acute staffing shortage, and has an enormous paper backlog. The government agency did not provide a time-frame for plus-up payments – but it’s encouraging that five million of them have already been sent.

Anyone unsure of the status of their stimulus check is encouraged to use the IRS Get My Payment tool, available on their website.

Trevor Filseth is a news reporter and writer for the National Interest. This first appeared earlier and is being reposted due to reader interest.

Image: Reuters.