Stimulus Check: The IRS might owe 9 million people a catch-up payment

Nov 15, 2020 | IRS - Internal Revenue Service, US Tax Return 1040 / 1040NR | 0 comments

If you’re still waiting for your first stimulus payment, there are several ways to hunt it down. As many as 9 million people were eligible for a first check but didn’t receive the payment because they needed to register with the IRS — an extra step most people didn’t have to take. The deadline is Nov. 21 to use the IRS Tool Get My Payment. Some people with dependents received only a partial payment and are still owed money. The deadline to get that in 2020 passed Sept. 30, but if you’re certain you meet the qualifications to receive the first stimulus check, these are warning signs that you should contact the IRS right now:

  • The Get My Payment tracking tool reports the IRS made your payment weeks ago and you haven’t received it.
  • If received a confirmation letter from the IRS that your payment was sent, but you didn’t get the funds.
  • Or you think you accidentally threw your prepaid card or check in the trash.
  • Or suspect someone stole your check or otherwise defrauded you.

If you filed a 2018 or 2019 tax return or receive government benefits, the IRS should automatically send your check without you having to do anything. You do NOT need to file another copy of your 1040 if you have not received anything from the IRS. If, however, you’re a US citizen, had a gross income in 2019 under $12,200 — or $24,400 as a married couple — and didn’t file a return for 2018 or 2019, you may need to give the IRS a bit of information before it can process your payment. Head to the Non-Filers site and see if the IRS needs something from you. The non-filers tool will be available until Nov. 21, after extending the deadline from Oct. 15. The IRS initially said that people who registered for a payment using the tool before the initial Oct. 15 deadline  should receive their check by the end of the year. And if you share custody of a child but you’re not married, you may each be able to receive $500 per child dependent.

How the IRS has sent the Stimulus payment

The IRS has so far sent money to at least 160 million people three different ways, starting with people who filed for direct deposit. Some people with more complicated personal situations are still waiting for their checks or even for catch-up payments. This creates a de facto priority order that could lead some Americans to receive their checks days or even weeks or months before others. We were able to identify 5 different situations among the US citizens receiving the Stimulus Check:

  1. Direct deposit recipients: People who already have their direct deposit information on file with the IRS or who provide that info when and if registration opens again should be first in line to receive a stimulus check. An electronic transfer of funds is faster and more efficient, which is why this group largely got their first payment faster.
  2. Social Security beneficiaries: With the first stimulus payment, many Social Security beneficiaries who had direct deposit information on file with the federal government received checks in the first week, though not always the first day.
  3. People who get paper checks: The IRS began to mail checks about a week later to those without direct deposit data on file.
  4. EIP card recipients: Economic Impact Payment debit cards are prepaid Visa cards, that IRS sent to about 4 million people starting in mid-May. If the IRS follows the same payment priority order, this group could begin to see their checks weeks after the first direct deposit transfers go out.
  5. People with more complex situations: This category includes people who received a check after June, are still waiting to receive their stimulus payment or did not know they need to complete an extra step or live abroad.

People used the first stimulus checks in these ways

A new survey last week on how people in the US used their first stimulus check shed light on the economic reality of the coronavirus’ effects. The survey from the Federal Reserve Bank of New York polled 1,300 households between June and August. The study found that of the 89% who reported receiving a stimulus check ($2,400 median total):

  • 29% spent the stimulus money (on essentials, nonessentials and donations).
  • 4% saved their stimulus money.
  • 5% used it to pay down debt.

You won’t have to pay taxes on any stimulus money

The IRS doesn’t consider stimulus money to be income. That means a payment you get this year won’t reduce your refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won’t have to repay part of your stimulus check if you qualify for a lower amount in 2021. The IRS said if you didn’t receive everything you were owed this year, you can claim it as a credit on your 2020 federal income tax return by filing in 2021.

US Tax Consultants is a company with offices in Madrid, Asturias (Spain) and Algarve (Portugal), with national and international presence, and with 55 years of experience in filing American and Spanish taxes. Thanks to our professionalism and quality control, our clients have the peace of mind that provides a job well done .If you have any questions/doubts, please, either post them in this blog below, or send us an email to info@ustaxconsultants.es or book an appointment via phone or Zoom so we can solve your questions / doubts in the shortest period of time.


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