Third stimulus check: Will you get a plus-up payment?

Third stimulus check: Will you get a plus-up payment?

As another 25 million checks arrive in the third round of stimulus payments, recipients are now hoping for a plus-up payment to surprise them in their mailbox. The latest batch of checks are going out to Americans, including the social security recipients with SSI and SSDI, while the IRS has stated that this will include one million plus-up payments.

These are automatic adjustments, so you don’t have to file an amended tax form. They’ll go to people who are still owed a partial payment.

The money will be coming through direct deposits, mailboxes and prepaid EIP debit cards and it is important to know the estimated amount you should be receiving in your stimulus check so you can keep an eye out for a plus-up payment if it’s owed to you. There is more on that below.

What is the plus-up payment and how do you receive it?

The IRS uses your tax return information to calculate how much you are eligible to receive in your stimulus payment, but it may find that it owes you more money because of a number of reasons.

“This batch includes the first of ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns,” the IRS said in a press release from April 1.

Eligibility for plus-up payments includes a decline in income in 2020 compared to 2019 or the addition of a new dependent.

If you got your stimulus payment through direct deposit, that’s how you’ll get your plus-up payment too. If the IRS doesn’t have your details on file, you may receive a paper check instead.

Prior to this third batch of payments, the IRS sent checks to people who had either filed 2019 or 2020 tax returns or who had submitted their information to the IRS last year through its non-filer tool online. As the IRS continues to process the tax forms from 2020, Plus-up payments will continue on a weekly basis.

How can you claim your plus-up?

The now-extended tax filling season of 2020 is giving people the opportunity to claim stimulus money that they are owed but haven’t received yet.

The IRS says there are two ways people can do this.

  • Tax filers can claim a correction on their 2020 tax return through the Recovery Rebate Credit, which is on Line 30 of Form 1040, for the first two stimulus payments. That extra money will be sent with your tax refund.
  • If the IRS already sent the third stimulus check but you are owed more based on your 2020 tax returns, the IRS will automatically adjust your payment after you file your taxes with what’s called a plus-up check. This could happen for people who had a loss of income in 2020. The IRS offers free filing options for those who earn 72,000 dollars or less. In addition, there are free electronic forms available for those who have incomes above 72,000 dollars.

Why did I get less plus-up payment than I expected?

The IRS has said that some people may get smaller adjustments from the Recovery Rebate Credit than they might have expected.

If that happens, the IRS said it will send a letter or notice explaining any change, but it also warned that such a glitch could lead to a “slight delay in processing the return”.

The two potential reasons why this may happen is because of the different eligibility rules applied to each round of stimulus payments. For instance, the first round of stimulus checks provided 500 dollars per eligible dependent, the second one 600 dollars and the third handed out 1,400 dollars per child. The new cut-off age for dependents can also create a discrepancy in the amount anticipated.

The other reason is in the case of divorced parents, where the child was claimed as a dependent on another person’s 2020 tax return. The person who claims the child as a dependent on their tax return should receive the stimulus check. But, some divorced parents alternate years when they claim their children as dependents, which can complicate the issue. Only the parent who claimed the child on their 2020 taxes should get the adjustment from the Recovery Rebate Credit, according to the tax website

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