Do you qualify for “plus-up payments”?
For weeks now the IRS has been consistent in sending out batches of stimulus checks. This week, they have disseminated more or less 2.68M checks amounting to around $5.6 billion. Of those figures, 730,000 checks amounting to $1.3 billion were sent as plus-up payments. But there is still a lot to go through of the $1.9 trillion American Rescue Plan. The IRS is scheduling weekly rounds of payments for those who have yet to receive their stimulus checks and those who are due a plus-up payment.
What are plus-up payments?
If the IRS used an older tax return when they calculated your third payment from the American Rescue Plan, for a stimulus check, you could be due more money. This additional money that the IRS owes you is the plus-up payment which you don’t need to reapply for because the IRS has declared that they will be the ones to do it for you. You won’t need to file an amended return because IRS will automatically recalculate your payment to reconcile what you have received and what is actually owed to you.
You won’t need to do anything but wait for the check to arrive. Well, maybe you could do something, just as a safety net. You could double-check your payment to check just how much you will be receiving, then track your payments and retain relevant IRS letters in case you find yourself receiving less than what you expected.
Just last week these plus-up payments started going out the door. Just this week, the IRS sent around 730,000 of these payments and it is to be expected that they will be sending more these coming weeks.
Since this year, the tax season has been extended to May 17, it’s to be expected that there will be delayed tax returns. But once you are able to submit your 2020 tax return, the IRS can now start to recalculate your payment and determine if you are eligible for plus payments. If you received your stimulus check by direct deposit, the same mode of payment for your plus-up will be used.
The IRS could also owe you more than just the plus-up
Remember that there has been a lot of changes over the months with regard to any stimulus package really. So we advise you to check where to find your adjusted gross income and be proactive about claiming any new dependent. To find out more, you can contact your local tax expert.
What to do when you received a smaller check amount
Start by revisiting your qualifications to make sure you are eligible for the amount you are expecting. The IRS could open up claims for missing stimulus money before its deadline in December. If fail to contest it by that time, you could need to wait till next year when you file your tax return.
The IRS is given up until December 31, 2021, to send out their checks and these plus-up payments. If you don’t receive it by that time, you can file for missing money through your 2021 tax return in April 2022. This is similar to a Recovery Rebate Credit.
Some reasons why your calculations don’t add up
- A calculation error occurred
- You qualify for an adjustment
- You are receiving SSDI or SSI benefits or veteran’s benefits and is waiting to recei9ve your payments.
- You have a new dependent
- The IRS based your payments on 2019 return and you are owed money for your 2020 gross income or new dependents
Consult your local CPA
If you are having trouble reconciling your expected payments from the actual amount of payments you received, you can always ask for professional help. Here at Mehanna Advisors, we are always ready to answer any of your queries. Stay on top of today’s latest, by subscribing to our updates.