By John Waggoner, AARP, Updated December 30, 2020
The $600 economic impact payments have started going out by direct deposit and mail.
Most Americans have received their $1,200 stimulus checks, or economic impact payments (EIPs), as the Internal Revenue Service (IRS) calls them. The first round of stimulus money, which was approved in March and also included $500 payments for eligible dependent children, was sent via direct deposit, paper check and prepaid debit card.
Congress included a second round of stimulus checks in a new $900 billion coronavirus relief bill on Dec. 21 that offers most Americans payments of up to $600 for themselves and their dependent children, as a way to put money directly in the pockets of families struggling to manage the economic fallout of the pandemic.
The new stimulus relief legislation will give single adults a one-time payment of $600. Married couples who filed jointly will receive $1,200 total ($600 apiece). Families will get an additional $600 for each eligible child under 17. A family of four could get $2,400 in total payments. Adult dependents are not eligible for stimulus payments. And unlike the first round of stimulus payments, which saw checks issued to dead people, the second round of stimulus specifically prohibits payments to anyone deceased before Jan. 1, 2020.
As before, there are income limits for the second round of stimulus payments. Those who filed their 2019 federal taxes as a single taxpayer need to have had less than $75,000 in adjusted gross income to get the maximum payment. For heads of households, the limit is $112,500, and for couples the limit is $150,000. Payments are reduced by $5 per $100 adjusted gross income over the income limit. (Use our newly updated Coronavirus Stimulus Payment Calculator to estimate the amount of your second stimulus check.) Here is a timeline for the distribution of the second round of stimulus checks, based on guidance from the IRS and U.S. Treasury Department, as well as documents released by the House Committee on Ways and Means:
Week of December 21 Congress approved the new $900 billion coronavirus relief bill that includes $600 stimulus checks for eligible Americans and their dependent children under the age of 17 on Dec. 21. At that time, Treasury Secretary Steven Mnuchin told CNBC that, “People are going to see this money at the beginning of next week,” meaning the week of Dec. 28. However, the bill was not signed into law by President Donald Trump until Dec. 27.
Week of December 28 The IRS and Treasury announced that stimulus payments started going out via direct deposit on Dec. 29. Paper checks were scheduled to begin being mailed on Dec. 30. Payments will be issued automatically to eligible individuals who:
filed 2019 federal tax returns
registered for the first round of stimulus payments through the non-filer portal on IRS.gov by Nov. 21
receive Social Security (both retirement and disability), Supplemental Security Income (SSI), Railroad Retirement Board, or Veterans Affairs (VA) benefits
During the first round of stimulus payments, AARP worked hard to ensure that federal beneficiaries including Social Security recipients received stimulus payments automatically. When banking information is available, the IRS said it will issue payments electronically. If you get your federal benefits or tax refund by direct deposit — or if you got your earlier stimulus payment by direct deposit — you will most likely get this stimulus payment by direct deposit as well. For those eligible for a stimulus check who have addresses on file with the IRS but no banking information, payment will likely be made in the form of a paper check or debit card. For those receiving payment by mail, the IRS said the form of payment (either paper check or debit card) may differ from how you received your first stimulus payment. So if you received your first stimulus payment by paper check, you may instead receive a debit card for your second stimulus payment. Check your mail carefully to avoid throwing away your stimulus payment, the IRS warned. Social Security and other federal beneficiaries who received their first payments via Direct Express will receive their second payments the same way, the IRS said.
Early January 2021 According to the IRS and House Committee documents, automatic stimulus payments will continue to go out via direct deposit and mail into January. The IRS noted that payments made via direct deposit may show up in bank accounts as pending or provisional until Jan. 4, 2021, which is the official payment date. The IRS said you can check the status of your second stimulus payment at IRS.gov/GetMyPayment once the tool has been updated and relaunched by early January.
January 15 Per the relief legislation, the IRS has a deadline of Jan. 15 to issue the $600 stimulus payments. Those who have not been issued their money during this next round will need to file a 2020 federal income tax return and wait for the IRS to send their relief money in 2021. Technically, both rounds of stimulus checks are advances on 2020 tax credits and therefore are not taxable. “Individuals who do not receive an advance payment automatically will be able to claim a credit for their EIP amount on their 2020 federal income tax return,” according to the House Committee. If any additional amount beyond the initial $600 stimulus payment is approved by Congress after payment has been issued, the IRS said the difference will be “topped up as quickly as possible.”
Late January/Early February The IRS typically begins accepting tax returns in late January or early February. (Tax returns for 2019, for example, were accepted starting Jan. 27, 2020.) Those who are eligible for a $600 stimulus check but didn’t receive it automatically can claim the amount as a tax credit (called the Recovery Rebate Credit) on their 2020 federal income tax return. Those who were eligible for a $1,200 stimulus check (or $500 dependent payment) but didn’t receive it will also be able to claim that money as a tax credit on their 2020 return. Typically, taxpayers with direct deposit who file their federal returns electronically can expect their refunds in one to three weeks. Those who mail in their returns and get a refund in the form of a paper check typically have to wait as long as two months. Keep in mind that due to the pandemic the IRS has taken longer than usual to process tax returns.
RECAP of distribution of first round of stimulus checks in 2020
The IRS said it has issued about 160 million stimulus checks worth approximately $270 billion for the first round of economic impact payments to eligible Americans. Here’s a recap of the months-long timeframe required to distribute those stimulus checks during the pandemic in 2020.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. By April 15, 80 million Americans received their stimulus checks via direct deposit. Beginning the week of April 20, the IRS started making additional rounds of weekly payments by direct deposit to people who provided direct deposit information on IRS.gov.
The IRS also began issuing paper checks on a weekly basis to individuals who hadn’t provided direct deposit information but for whom the IRS had a mailing address. The checks were issued to the people with the lowest incomes first.
By the end of April, adult Social Security retirement, survivor and disability insurance (SSDI) beneficiaries who did not file tax returns in 2018 or 2019 started to receive their payments if they received their benefits via direct deposit. (Nearly 99 percent of Social Security beneficiaries use direct deposit.)
Many adult Supplemental Security Income (SSI) recipients received their payments by early May, in the same way they received their normal benefits. In late May, the IRS accelerated the issuance of millions of remaining stimulus payments by paper check. The IRS also started issuing stimulus payments, both electronically and by paper check, to approximately 1.4 million SSI recipients and 10.4 million Social Security beneficiaries whose monthly benefits are managed on their behalf by representative payees.
In addition, the IRS announced it would mail out stimulus payments in the form of prepaid debit cards rather than paper checks to approximately 4 million eligible taxpayers who didn’t have bank account information on file.
The IRS continued to issue stimulus payments by paper check. In addition, Social Security beneficiaries living in U.S. territories began receiving their stimulus payments. The tax authority in each U.S. territory, rather than the IRS, sent out the stimulus payment to its residents based on information provided to territories by the IRS.
The IRS sends out checks to people who used the IRS non-filers tool before May 17 and didn’t get their $500 stimulus checks for dependent children under age 17. Direct deposit payments for those dependents went out on August 5 and checks were mailed August 7.
Non-filers who get Social Security retirement and disability, SSI, Railroad retirement or VA benefits and who haven’t used the non-filers tool to enroll their eligible dependent children got a second chance, from August 15 through September 30, to use it.
In early to mid-September, the IRS sent catch-up stimulus checks to about 50,000 individuals whose portion of the payment was diverted to pay their spouse’s past-due child support. Payments were mailed as checks to any eligible spouse who submitted Form 8379, Injured Spouse Allocation, along with their 2019 federal income tax return, or in some cases, their 2018 return. These spouses did not need to take any action to get their money.
The IRS also sent a letter to an estimated 9 million people who hadn’t filed a tax return for 2018 or 2019, urging them to claim their stimulus checks at IRS.gov. These are people who don’t typically have a tax return filing requirement because they have very low incomes, based on Forms W-2, 1099s and other third-party statements available to the IRS. But many in this group are still eligible to receive an economic impact payment.
The IRS set a Nov. 21 deadline for people to use Non-Filers tool on IRS.gov to register for a stimulus payment in 2020. Under the CARES Act, the IRS had until Dec. 31 to pay out $1,200 stimulus checks and $500 dependent checks.
Any eligible American who missed out on the first round of stimulus checks can claim the missing payment in 2021 in the form of a tax credit when they file a 2020 tax return.