Some of your friends or relatives or co-workers likely received their stimulus payments in their bank accounts today. Did you?
The federal government last week said payments of up to $600 per person will start going out Jan. 4 and will continue for several weeks. Some will be by direct deposit; others will be by a mailed check or debit card. (Given the performance of the U.S. Postal Service in recent months, good luck with that).
The danger for consumers is if they allow desperation or greed to suck them into a scam. Resist the temptation to suspend your common sense.
Here are some tips and things to know:
If you didn’t get a payment for the last round of COVID relief last year, watch your mailbox. You may have received last year’s payment previously and mistakenly threw it away. Or there could have been an error that gets corrected this time around with the new, $600 payment. In any case, you have more motivation to go through your mail carefully. The U.S. Treasury said it started mailing checks Dec. 30. Some people will receive a debit card instead.
The second round of payments is generally $600 for singles and $1,200 for married couples who filed a joint return. In addition, families with qualifying children will receive $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment. Eligibility is based on an adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing jointly. Generally, people are eligible if they’re U.S. citizens or resident aliens who are not eligible to be claimed as a dependent on someone else’s return.
Watch out for scams. Neither the IRS nor banks will contact you asking for any personal information. There already are fraudulent text messages, emails, phone calls and social media posts that request “a small processing fee” or personal information supposedly needed for people to get their COVID impact payments. If you get a call or text or email, do not call the phone number left and do not click on any links. Either ignore the messages or, if you’re concerned, contact your bank or the IRS at a number you look up independently.
For example, the Better Business Bureau says it’s received complaints from consumers enticed by links to “request” benefit payments. “The link will take you to an application, which prompts you to enter information in order to ‘make sure you are getting all the payments owed to you,’ ” the BBB says.
People who were eligible but didn’t receive either the first or second round of what are called “economic impact payments” will be able to recoup their money when they file their 2020 tax returns in the coming months. On tax materials, people will see the economic impact payments referred to as the “recovery rebate credit” (RRC) on Form 1040 or Form 1040-SR because the payments are technically an advance payment of the RRC.
Remember you may be eligible for payments based on your 2020 income, even if you weren’t eligible based on your 2019 return. “The IRS cannot correct or issue additional payments based on your 2020 income until you file your 2020 tax return in 2021,” the IRS says. “The IRS used your 2019 tax return (or 2018 if 2019 wasn’t on file) to determine your eligibility and calculated any Economic Impact Payment. If you don’t get an Economic Impact Payment in 2020 or you don’t receive the maximum amount, you may be eligible to claim the Recovery Rebate Credit when you file your 2020 federal income tax return in 2021.”
The IRS encourages taxpayers who didn’t get either or both payments to review their eligibility. Many, including recent college graduates, may be eligible, the IRS says.