Stimulus Heaven: Here Are the Many Benefits Americans Could Qualify For

Stimulus Package

Stimulus Heaven: Here Are the Many Benefits Americans Could Qualify For

Recent stimulus measures include a wide variety of benefits from plus-up payments to an expanded child tax credit to health care support through COBRA.

Key point: There are many ways Americans can get federal support to help make ends meet. Do you qualify for one or more of these benefits?

It now appears that $1,400 coronavirus stimulus checks and “plus-up” payments aren’t the only cash windfalls to look forward to.

According to the Internal Revenue Service, tax refunds on 2020 unemployment benefits are slated to start hitting eligible bank accounts this month.

The newest payments are part of President Joe Biden’s $1.9 trillion American Rescue Plan, which waived federal tax on up to $10,200 of unemployment benefits—or $20,400 for married couples filing jointly—that were received in 2020. Unemployment benefits are typically treated as taxable income.

However, keep in mind that households with $150,000 or more in income are ineligible for the benefits.

The IRS has confirmed that it will issue the refunds automatically to eligible U.S. taxpayers.

“Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund,” the agency noted.

“The first refunds are expected to be made in May and will continue into the summer,” it added.

However, many of those unemployed who are eligible for the tax break had already filed their tax returns by the time Biden signed the legislation. Because of this, the IRS is automatically recalculating tax liabilities for each individual, which may delay some of the payments.

“Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed,” the agency stated.

Although the IRS has acknowledged that there is no need to file an amended return, some early filers may still need to—especially if their recalculated income makes them eligible for additional federal credits and deductions.

The agency has also noted that there is a high likelihood that the processing of tax returns and the associated refund deliveries will be delayed for many individuals, as it continues to deal with new tax codes and the continuous disbursement of stimulus checks. Adding to the wait is the new extended Tax Day deadline of May 17.

For some early filers, there have been reports that the average wait time for a tax refund has ranged from six weeks to eight weeks, which is far longer than the typical wait time of three weeks or less.

Others have filed in order to claim either or both of the missing first two stimulus checks. For this tax season, a Recovery Rebate Credit has been added to all returns, so that people can get their hands on the overdue payments.

“If you didn’t get any payments or got less than the full amounts, you may qualify for the Recovery Rebate Credit and must file a 2020 tax return to claim the credit even if you don’t normally file,” the IRS website states.

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn. This first appeared earlier and is being reposted due to reader interest.

Image: Reuters.