The IRS and the Treasury indicated that they have delivered with successful nearly 130 million economic impact payments to Americans in less than a month, and more are on the way.
By Miami Diario Newsroom
But some Americans may have received a different payment amount than they expected. The payment amount varies based on income, filing status, and family size.
Here are possible reasons or common scenarios that may explain why you received a different payment amount than expected:
You haven't filed a 2019 tax return, or the IRS hasn't finished processing your 2019 return
Payments are automatic for eligible individuals who filed a 2018 or 2019 tax return. The IRS typically uses information from the 2019 tax return to calculate the Economic Impact Payment.
Instead, the IRS will use the 2018 return if the taxpayer has not yet filed for 2019. If a taxpayer has already filed for 2019, the agency will continue to use the 2018 return if the IRS has not finished processing the 2019 return.
Remember, accepting a tax return electronically by the IRS is different from completing the processing; any problem with the 2019 return means the IRS would use the 2018 filing.
If the IRS used the 2018 return, several changes in your life in 2019 would not be reflected in the payment. These may include higher or lower income or the birth or adoption of a child.
In many cases, however, these taxpayers can claim an additional amount on the 2020 tax return they will file next year. This could include up to an additional $500 for each qualifying child not reflected in your Economic Impact Payment.
Claimed dependents are not eligible for an additional $500 payment
Only children eligible for the child tax credit qualify for the additional payment of up to $500 per child. To claim the child tax credit, the child generally has to be related to the taxpayer, live with him for more than half the year, and provide at least half of his support.
In addition to your own children, adopted children, foster children (placed in your home by a licensed placement agency), eligible children may include the taxpayer's minor siblings, grandchildren, nieces and nephews if they can be claimed as dependents.
In addition, any qualifying child must be a US citizen, permanent resident, or other qualifying resident alien. The child must also be under the age of 17 on the last day of the tax return year on which the IRS bases the payment determination.
A qualifying child must have a valid Social Security number (SSN) or an Adoptive Taxpayer Identification Number (ATIN)., for its acronym in English). A child with an Adoption Taxpayer Identification Number (ITIN) is not eligible for an additional payment.
Parents who are not married to each other and do not file a joint return cannot both claim their qualifying child as a dependent. The parent who claimed her child on his 2019 return may have received an additional economic impact payment for his qualifying child.
When the parent who did not receive an additional payment files their 2020 tax return next year, they can claim up to an additional $500 per child on that return if they qualify to claim the child as their qualifying child for 2020.
Dependents are college students
Under the CARES Act, dependent college students do not qualify for the Economic Impact Payment (EIP), and although their parents can claim them as dependents, they typically do not qualify for the additional $500 payment.
For example, under the law, a 20-year-old full-time college student claimed as a dependent on his mother's 2019 federal income tax return is not eligible for a $1,200 economic impact payment.
In addition, the student's mother will not receive an additional $500 Economic Impact Payment for the student because she does not qualify as a child under the age of 17. This scenario could also apply if a parent's 2019 tax return has not yet been processed by the IRS before payments were calculated, and a college student was claimed on a 2018 tax return.
However, if the student cannot be claimed as a dependent by his or her mother or anyone else for 2020, that student may be eligible to claim a $1,200 credit on their 2020 tax return the following year.
Claimed dependents are parents or relatives, age 17 or older
If a dependent is age 17 or older, they do not qualify for the additional $500 payment. If a taxpayer claimed a parent or any other relative age 17 or older on their tax return, that dependent will not receive a $1,200 payment. In addition, the taxpayer will not receive the additional $500 payment because the parent or other relative is not a qualifying child under the age of 17.
However, if the parent or other relative cannot be claimed as a dependent on the taxpayer's or anyone else's return for 2020, the parent or relative may be eligible to individually claim a $1,200 credit on their filed 2020 tax return. next year.
Overdue child support reduced payment as compensation
The Economic Impact Payment can only be affected by past due child support. The Tax Service Office will send the taxpayer a notice if that action occurs.
For taxpayers who are married filing jointly and filed an injured spouse claim with their 2019 tax return (or 2018 tax return if they have not filed their 2019 tax return), half of the total payment will be sent to each spouse. Only the payment from the spouse who owes past due child support will be reduced as compensation.
The IRS is aware that, in some cases, a portion of the payment sent to a spouse who filed an injured spouse claim with their 2019 tax return (or 2018 tax return if no return has been filed 2019 taxes) has been affected by an overdue alimony from the spouse who owes child support.
The IRS is working with the US Department of Health and Human Services, Office of Fiscal Services and Office of Child Support Enforcement to resolve this issue as quickly as possible.
If you filed an injured spouse claim with your return and are affected by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the problem is resolved. "We apologize for any inconvenience this may have caused," the IRS said.
Seizures of goods reduced the amount of the payment
Federal tax refunds, including the Economic Impact Payment, are not protected from asset seizure by federal law once the payments are deposited into a taxpayer's bank account.
What if my Economic Impact Payment amount is incorrect?
Everyone should review the eligibility requirements for their family to make sure they meet the criteria.
In many cases, eligible taxpayers who received a smaller-than-expected Economic Impact Payment may qualify to receive an additional amount early next year when they file their 2020 federal income tax return. The EIP is technically an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return.
Everyone should keep for their records the letter they receive in the mail within a few weeks after their payment is issued.
When taxpayers file next year, they can claim additional credits on their 2020 tax return if they're eligible for them. The IRS will provide more details on IRS.gov about the action you may need to take.
The economic impact payment will not reduce a taxpayer's refund or increase the amount they owe when they file a tax return early next year. It is also not taxable and therefore should not be included in income on a 2020 return.
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