Round 3 - Economic Impact Payments

Update from IRS

March 12, 2021 - 

The Internal Revenue Service announced that the third round of Economic Impact Payments will begin reaching Americans over the next week.

Following approval of the American Rescue Plan Act, the first batch of payments will be sent by direct deposit, which some recipients will start receiving as early as this weekend, and with more receiving this coming week.

Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit.

No action is needed by most taxpayers; the payments will be automatic and, in many cases, similar to how people received the first and second round of Economic Impact Payments in 2020. People can check the  Get My Payment tool on IRS.gov on Monday to see the payment status of the third stimulus payment.

IRS Commissioner Chuck Rettig said, "The payments will be delivered automatically to taxpayers even as the IRS continues delivering regular tax refunds. We urge people to visit IRS.gov for the latest details on the stimulus payments, other new tax law provisions and tax season updates."

Third Round of Economic Impact Payment Highlights:

The IRS will automatically calculate amounts.   In general, most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return. As with the first two Economic Impact Payments in 2020, most Americans will receive their money without having to take any action. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17.

Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival. Social Security and other federal beneficiaries will generally receive this third payment the same way as their regular benefits. A payment date for this group will be announced shortly.

The third round of Economic Impact Payments (EIP3) will be based on the taxpayer's latest processed tax return from either 2020 or 2019. This includes anyone who successfully registered online at IRS.gov using the agency's Non-Filers tool last year, or alternatively, submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer's 2020 return, the agency will instead make the calculation based on that return.

In addition, the IRS will automatically send EIP3 to people who didn't file a return but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits. This is similar to the first and second rounds of Economic Impact Payments, often referred to as EIP1 and EIP2.

For those who received EIP1 or EIP2 but don't receive a payment via direct deposit, they will generally receive a check or, in some instances, a prepaid debit card (referred to as an "EIP Card). A payment will not be added to an existing EIP card mailed for the first or second round of stimulus payments.

Under the new law, an EIP3 cannot be offset to pay various past-due federal debts or back taxes.

The IRS reminds taxpayers that the income levels in this new round of stimulus payments have changed. This means that some people won't be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit. Payments will begin to be reduced for individuals making $75,000 or above in Adjusted Gross Income ($150,000 for married filing jointly.) The reduced payments end at $80,000 for individuals ($160,000); people above these levels are ineligible for a payment. More information is available on IRS.gov.

New payments differ from earlier Economic Impact Payments

The third round of stimulus payments, those authorized by the 2021 American Rescue Plan Act, differs from the earlier payments in several respects:

  • The third stimulus payment will be larger for most people. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents will get $1,400, while a family of four (married couple with two dependents) will get $5,600.
  • Unlike the first two payments, the third stimulus payment is not restricted to children under 17. Eligible families will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents.

For additional information, see  More details about the third round of Economic Impact Payments.

Avoid scams related to economic payments, COVID-19

The IRS urges taxpayers to be on the lookout for scam artists trying to use the impact payments as cover for schemes to steal personal information and money.

Note that the IRS will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

Also, watch out for emails with attachments or links claiming to have special information about economic impact payments or refunds.
 

Information regarding Round One and Round Two Economic Impact Payments:

On May 6, 2020, the IRS issued two important updates to its Economic Impact Payment Information Center FAQs related to deceased recipients that is a change or clarification from what the IRS originally advised. This guidance requests that Economic Impact Payments (EIPs) sent to deceased recipients be returned to the IRS by the deceased’s beneficiary. The IRS has not placed the responsibility for returning these EIPs on the deceased recipient’s financial institution. However, financial institutions may now want to consider returning future ACH entries and refusing to deposit checks to deceased EIP recipients as a means of assisting the recipient’s beneficiaries in complying this new guidance and to notify the beneficiaries of deceased recipients of prior EIP payments of this new guidance that includes the IRS’ return instructions.

The IRS has announced that they will start sending Economic Impact (Stimulus) Payments to eligible tax payers beginning April 15.  

These payments will not all go out at once, rather, they will be spread out over several weeks.   Tax filers without Direct Deposit will likely begin receiving checks beginning May 1, 2020.    If you are not a tax filer, please read the information below regarding Non-Tax Filers.

Payment Recipients:  Watch for an IRS letter

For security reasons, the IRS plans to mail a letter about the economic impact payment to the Taxpayer’s last known address within 15 days after the payment is paid.  The letter will provide information on how the payment was made and how to report any failure to receive the payment.  If a taxpayer is unsure they’re receiving a legitimate letter, the IRS urges taxpayers to visit:  www.IRS.gov     

There is information for both Tax Filers and Non-Filers regarding your payment status and filing applications.  

For Tax Filers:   People who filed a tax return for 2019 or 2018

No additional action is needed by taxpayers who:

have already filed their tax returns this year for 2019. The IRS will use this information to calculate the payment amount.
haven’t filed yet for 2019 but filed a 2018 federal tax return. For these taxpayers the IRS will use their information from 2018 tax filings to make the Economic Impact Payment calculations.

For Non-Tax Filers:  People who aren't typically required to file a tax return

Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate Economic Impact Payments of $1,200 to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group who don't need to take action.

For Social Security, Railroad retirees and SSDI who have qualifying children, they can take an additional step to receive $500 per qualifying child.

There are other individuals such as low-income workers and certain veterans and individuals with disabilities who aren’t required to file a tax return, but they are still eligible for the Economic Impact Payments.

If you don’t have to file, use the "Non-Filers: Enter Payment Info Here" application to provide simple information so you can get your payment.

Check out these  Economic Impact Payment FAQs

Avoid scams related to economic payments, COVID-19

The IRS urges taxpayers to be on the lookout for scam artists trying to use the impact payments as cover for schemes to steal personal information and money.

Note that the IRS will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

Also, watch out for emails with attachments or links claiming to have special information about economic impact payments or refunds.


For additional information and tips on how to avoid COVID-19 related scams, see the Cyber Tips Newsletter:   
What You Need to Know About Covid-19 Scams