It is estimated that 85% of Americans will be eligible for the payments as part of the $ 1.9 trillion COVID bill signed by President Joe Biden. The goal is to get millions of payments paid out in the coming weeks.
The timeframe is consistent with how quickly the payments were sent in December, which was processed three days after then-President Donald Trump signed the bill.
But not all payments are made at the same time. Those whose bank details are with the Internal Revenue Service are likely to get the money first, as it is deposited directly into their accounts. Others may receive paper checks or prepaid debit cards in the mail.
The money usually first appears in bank accounts as current or provisional payments. Some banks have told customers that funds appearing this weekend will be available from Wednesday.
While the first batch of payments began processing Friday, more will be rolled out in the “coming weeks,” a treasury official said during a phone call with reporters Friday.
Direct deposits go out first, but paper checks and debit cards go out before the end of the month.
For most people, no action is required to receive the money. Social Security recipients and those who receive Veteran Affairs benefits should also get the money automatically, even if they don’t file taxes.
People can start checking the status of their payments on Monday using the IRS tool Get My Payment Online.
“If people don’t see an immediate deposit in the next few days, there’s no reason to be concerned. These taxpayers will receive payments in subsequent installments,” an IRS official said during the interview.
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Who gets a payment?
According to an estimate by the Penn Wharton Budget Model, the money is expected to reach about 90% of families. Families receive an additional $ 1,400 per dependent, so a couple with two children can receive up to $ 5,600. Unlike previous rounds, families now receive the extra money for adult dependents over the age of 17.
The full amount goes to individuals earning less than $ 75,000 in adjusted gross income, householders (such as single parents) earning less than $ 112,500, and married couples earning less than $ 150,000. But then payments are gradually phased out as income increases.
Lawmakers have narrowed the scope of payments this time around so that not everyone who received a previous check will get one now. It cuts off individuals who earn at least $ 80,000 a year in adjusted gross income, householders who earn at least $ 120,000, and married couples who earn at least $ 160,000 – regardless of how many children they have.
The first round of payments that went out last year was worth up to $ 1,200 and excludes individuals who made at least $ 99,000, head of housekeeping with one child making more than $ 136,500, and married couples with no children making more than $ 198,000 – but families made it were slightly more eligible if they had children. About 160 million payments were made, with 94% of families receiving the money.
The second round, which was worth up to $ 600, was wound down a little faster because the full amount was smaller. It was completely phased out at $ 87,000 for single filers without children and $ 174,000 for married couples filing jointly without children. Again, those who earned a little more were still eligible if they had children. About 158 million payments were made, of which 92% of families received them.
What year are the income limits based on?
The new income thresholds are based on the most recent taxpayer return. If they’ve already filed a 2020 return by the time the payment is sent and processed, the IRS will base the eligibility on their adjusted gross income for 2020. If not, it will be based on the return for 2019 or the information submitted through an online portal set up last year for people who don’t usually file a tax return.
At this point, the IRS has no plans to reopen the portal. Instead, officials are encouraging people to file tax returns for 2020. Low-income people can use the agency’s free file option.
If your income in 2019 was lower than your wage in 2020, you no longer owe any money. But if your income fell in 2020, filing your tax return now – before the payments are made – could mean you’re getting a bigger check.
Most people receive the payments automatically, but there are many they missed – for a variety of reasons. An estimated 8 million eligible people did not receive the first round of payments last year.
Many of these people are on very low incomes and do not normally need to file a tax return. Last year, the IRS set up an online portal where they could register for the money. It is not yet clear whether the agency will reopen the portal for the third payment round.
People who have moved or changed bank accounts since they last filed tax returns may also have missed out.
Those who should have paid money during the first two rounds of payment and did not receive it can claim it as a tax credit, known as the Recovery Rebate Credit, on their 2020 tax return.
The Associated Press contributed to this report.
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