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Last updated: 02/02/2021


The COVID-19 pandemic continues to affect millions of taxpayers. TaxAct has you covered with the information you need to collect and properly report stimulus payments.

Note: This information applies mostly to the second stimulus package signed into law on 12/27/2020. For information relating to the initial stimulus package contained in the CARES Act (enacted 3/27/2020) see 2019 - COVID-19 Response: Economic Impact (Stimulus) Payment FAQs

We have consolidated your most frequently asked questions below.



Second Round - Economic Impact (Stimulus) Payments


Eligibility

The eligibility requirements for the second stimulus payment are the same as the first round of payments issued earlier in 2020. According to the IRS, a taxpayer is eligible "if you were a U.S. citizen or U.S. resident alien in 2020, are not a dependent of another taxpayer for tax year 2020, and have a social security number valid for employment that is issued before the due date of your 2020 tax return (including extensions)."

Taxpayers will receive a reduced payment if their AGI is between:

  • $75,000 and $99,000 if their filing status was single or married filing separately
  • $112,500 and $136,500 for head of household
  • $150,000 and $198,000 if their filing status was married filing jointly

If you qualify and filed a tax return in 2019 (or if you have received Social Security or Railroad Retirement benefits) you will automatically receive the second payment.

You do not qualify if:

  • You are claimed as a dependent on another's tax return.
  • You don't have a social security number
  • You are a nonresident alien

You will not receive a payment for anyone claimed as an "Other dependent".

To avoid fraud, the IRS is requiring you to file a 2020 tax return.

The IRS will use the most recently updated taxpayer income, dependent(s) information, and bank account information on file. For most, that will be from the 2019 tax return. If you updated bank account information associated with Social Security or Veteran's benefits, or via Stimulus Registration in 2020, that account information will be used. Bottom line - the most recent bank account information the IRS has on file will be used for direct deposit when possible.

This round, there will not be an online portal set up to allow you to change bank information.

For more information regarding direct deposits, including what happens if stimulus money is sent to the wrong account, see IRS Statement — Update on Economic Impact Payments

No. You can still claim the child as a dependent but, similar to the Child Tax Credit, the $600 amount is only for dependents under age 17.

If you have no dependents, nothing. You will automatically receive your stimulus payment. If you do have a dependent(s), file a 2020 tax return.

Payment Amount

Use the following calculator to determine your amount:

  1. Start by determining your maximum credit
    • $600 for each taxpayer (Single/HOH = $600, Joint = $1,200)
    • Add $600 for each qualifying child
  2. Determine if the credit will be phased out
    • Single – Phase out starts at $75,000
    • Joint – Phase out starts at $150,000
    • HOH – Phase out starts at $112,500
    • Is your AGI over this amount?
      • No – your stimulus payment is the credit calculated in Step 1. Stop here.
      • Yes – go to Step 3
  3. Subtract the amount in Step 2 from your AGI
  4. Multiply Step 3 by 5%
  5. Subtract Step 4 from Step 1. This amount is your stimulus payment.

Yes. The IRS will not reduce your payment to cover any back taxes owed.

Yes. Since you filed a return, you will automatically receive a payment if you qualify.

Child support payments and most other wage garnishments will not affect your stimulus payment.

Yes, but you will likely receive that payment via check or prepaid debit card.

Payment Receipt

The IRS will deposit the funds into your bank account if they have the correct information on file. You can use the IRS Get My Payment tool to track the status of your payment. Note: The IRS site is updated only once per day, typically overnight, so there is no need to recheck your status until the next day.

For more information regarding direct deposits, including what happens if stimulus money is sent to the wrong account, see IRS Statement — Update on Economic Impact Payments

The Get My Payment tool is an IRS-run website, so TaxAct doesn't have a direct way to troubleshoot that for you. The IRS has posted Get My Payment Frequently Asked Questions to help explain what may be happening.

For more information regarding direct deposits, including what happens if stimulus money is sent to the wrong account, see IRS Statement — Update on Economic Impact Payments

The IRS did incorrectly send some stimulus payments to the wrong bank account. Please see Second Stimulus Payment Timing FAQs for the most up-to-date information regarding this issue. You can also refer to the IRS Statement — Update on Economic Impact Payments

If your refund wasn't direct-deposited, it's likely that the IRS doesn't have your bank account information or the information you submitted was incorrect. You will receive your stimulus payment via check or prepaid debit card.

If you received your initial Stimulus Payment via Direct Express, you will receive the second payment the same way.

Many payments have already been direct-deposited.

No. If the IRS doesn't have bank account information specified for direct deposit you will be issued a check or prepaid debit card.

Prior to February 11, 2021 sign in to your TaxAct account and make the needed adjustments to the Recovery Rebate Credit section. After February 11, 2021 you will need to amend your return.



Recovery Rebate Credit


Details and Eligibility

The Recovery Rebate Credit was added for 2020, as part of the CARES Act, to reconcile your Economic Impact (stimulus) payment on your 2020 tax return. The Consolidated Appropriations Act, 2021 added additional funds to this credit which basically serves as a second stimulus payment for most taxpayers.

If you received the full amount you qualified for in 2020 in both rounds of stimulus payments, prior to filing your tax return, you will not receive the Recovery Rebate Credit and don't need to do anything further. If you were eligible for the payment but didn't receive the full amount you qualified for, you can fill out the Recovery Rebate Credit section on your 2020 Form 1040 or 1040-SR. TaxAct will prompt you to enter the required information and will calculate your credit amount.

For more information about the Recovery Rebate credit, including how to enter your information in TaxAct, see Form 1040 - Recovery Rebate Credit


If you received a stimulus payment in 2020, you will receive Notice 1444 from the IRS with the amount listed. When creating your return in TaxAct, you will be prompted to enter that amount. Based on your tax situation, TaxAct will calculate the amount (if any) of your Recovery Rebate Credit. If you didn't receive Notice 1444 and don't know the amount of the Economic Impact Payment you received, check your bank statements. The direct deposit may have the description "IRS TREAS".


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