IRS Tax News

  • 08 Apr 2021 11:25 AM | Anonymous

    Businesses can temporarily deduct 100% beginning Jan. 1, 2021

    WASHINGTON – The Treasury Department and the Internal Revenue Service today issued Notice 2021-25 providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants.

    Beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.

    Where can businesses get food and beverages and claim 100%?

    Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption.  However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores. 

    Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer.

    More information for business seeking coronavirus related tax relief can be found at IRS.gov.


  • 08 Apr 2021 11:24 AM | Anonymous

    Notice 2021-25 provides guidance regarding the temporary 100-percent deduction for expenses that are paid or incurred in 2021 and 2022, for food or beverages provided by a restaurant.  In particular, the notice explains when the temporary 100-percent deduction applies and when the 50-percent limitation continues to apply for purposes of § 274 of the Internal Revenue Code.

    Notice 2021-25 will be in IRB: 2021-17, dated 04/26/2021.


  • 08 Apr 2021 10:22 AM | Anonymous

    WASHINGTON –The Internal Revenue Service today reminded self-employed individuals, retirees, investors, businesses, corporations and others who pay their taxes quarterly that the payment for the first quarter of 2021 is due Thursday, April 15, 2021.

    The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments. The 2021 Form 1040-ES, Estimated Tax for Individuals, can help taxpayers estimate their first quarterly tax payment.

    Income taxes are pay-as-you-go. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.

    Most often, those who are self-employed or in the sharing economy need to make estimated tax payments. Similarly, investors, retirees and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any penalties.

    Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for more information.

    How to pay estimated taxes

    Form 1040-ES, Estimated Tax for Individuals, includes instructions to help taxpayers figure their estimated taxes. They can also visit IRS.gov/payments to pay electronically. The fastest and easiest ways to make an estimated tax payment is by using IRS Direct Pay, the IRS2Go app or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit IRS.gov/payments. If paying by check, taxpayers should be sure to make the check payable to the “United States Treasury.”
     
    Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be especially helpful to those who have dividend or capital gain income, owe alternative minimum tax or self-employment tax, or have other special situations.

    IRS.gov assistance 24/7

    Tax help is available 24/7 on IRS.gov. The IRS website offers a variety of online tools to help taxpayers answer common tax questions. For example, taxpayers can search the Interactive Tax Assistant, Tax Topics, Frequently Asked Questions, and Tax Trails to get answers to common questions.

    The IRS is continuing to expand ways to communicate to taxpayers who prefer to get information in other languages. The IRS has posted translated tax resources in 20 other languages on IRS.gov. For more information, see “We Speak Your Language.” 


  • 07 Apr 2021 7:52 AM | Anonymous

    Social Security and other beneficiaries bring total to more than 156 million payments; VA beneficiaries’ payments to be disbursed on April 14

    WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing more than 25 million payments in the fourth batch of Economic Impact Payments from the American Rescue Plan.

    Today’s announcement brings the total disbursed so far to more than 156 million payments, with a total value of approximately $372 billion, since these payments began rolling out to Americans in batches, as announced on March 12. 

    The fourth batch of payments began processing on Friday, April 2, with an official payment date of April 7, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:

    • In total, this batch includes more than 25 million payments, with a total value of more than $36 billion.
    • The largest block of these payments went to Social Security beneficiaries who didn’t file a 2020 or 2019 tax return and didn’t use the Non-Filers tool last year. More than 19 million payments, with a total value of more than $26 billion, went to these beneficiaries, which include Social Security retirement, survivor or disability (SSDI) beneficiaries.
    • More than 3 million payments, with a total value of nearly $5 billion, went to Supplemental Security Income (SSI) beneficiaries.
    • Nearly 85,000 payments, with a total value of more than $119 million, went to Railroad Retirement Board (RRB) beneficiaries.
    • This batch includes additional 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. This batch included more than 1 million of these “plus-up” payments, with a total value of more than $2 billion.
    • More than 1 million payments, with a total value of nearly $3 billion, went to people for whom the IRS previously did not have information to issue a payment but who recently filed a tax return and qualified for an Economic Impact Payment.  Payments to this group -- and the “plus-up” payments noted above -- will continue on a weekly basis going forward as the IRS continues processing tax returns from 2020 and 2019.
    • Overall, this fourth batch of payments contains nearly 24 million direct deposit payments (with a total value of over $33 billion) and more than 1 million paper check payments (with a total value of nearly $3 billion).

    Additional  information is available on the first three batches of Economic Impact Payments from the American Rescue Plan, which began processing on March 26, March 19, and March 12.

    No action is needed by most people to obtain this round of Economic Impact Payments. People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled.

    Payments to non-filer VA beneficiaries will be disbursed on April 14

    The IRS continues to review data received from Veterans Affairs (VA), which covers veterans and their beneficiaries who receive Compensation and Pension (C&P) benefit payments who don’t normally file a tax return.

    If no additional issues arise, the IRS expects to begin processing these VA payment files at the end of this week. Because the majority of these payments will be disbursed electronically, they would be received on the official payment date of April 14. The IRS projects VA beneficiary payment information would be available in the Get My Payment tool this weekend, April 10-11.

    Payments continue to be made rapidly and effectively

    The IRS and Treasury are disbursing Economic Impact Payments authorized by the American Rescue Plan quickly and successfully, while improving on previous rounds of payments.

    • Within two weeks of the American Rescue Plan becoming law, the IRS and Treasury had started disbursing 127 million payments, including 107 million completed direct deposits. At a similar point during the first round of Economic Impact Payments authorized a year ago, the first payments had yet to be completed.
    • Payments to Social Security and other federal beneficiaries are being issued faster than they were during the first round of payments a year ago.
    • Approximately 85% of the current round of payments have been made by direct deposit, up from 74% in the first round of payments and 77% in the second round.  This helps to expedite payments for millions of American families. 
    • Direct deposits are also more likely to be successfully delivered than mailed payments, and the return rate of direct deposits is also lower than in previous rounds of payments.
    • Over 3.1 million Direct Express cardholders have received payment electronically, more than a half-million more than in previous rounds.  Making most of these payments to Direct Express cards enables cardholders, many of whom are unbanked, to receive their Economic Impact Payment the same way they typically receive their federal benefits.

    Special reminder for those who don't normally file a tax return

    Some federal benefits recipients may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for a qualified dependent. Eligible individuals in this group should file a 2020 tax return to be considered for an additional payment for their qualified dependent as quickly as possible.

    People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. Individuals who didn't get a first or second round Economic Impact Payment or got less than the full amounts may be eligible for the 2020 Recovery Rebate Credit, but they’ll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return.

    Free tax return preparation is available for qualifying people.

    The IRS reminds taxpayers that the income levels in this new round of Economic Impact 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 payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment.

    Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.


  • 05 Apr 2021 2:22 PM | Anonymous

    WASHINGTON − As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than they expected. 

    It’s important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eligible people already received the first and second payments and shouldn't or don’t need to include this information on their 2020 tax return.

    People who didn’t receive a first or second EIP or received less than the full amounts may be eligible for the 2020 RRC. They must file a 2020 tax return to claim the credit, even if they don’t usually file a tax return.

    When the IRS processes a 2020 tax return claiming the credit, the IRS determines the eligibility and amount of the taxpayer’s credit based on the 2020 tax return information and the amounts of any EIP previously issued. If a taxpayer is eligible, it will be reduced by the amount of any EIPs already issued to them.

    If there’s a mistake with the credit amount on Line 30 of the 1040 or 1040-SR, the IRS will calculate the correct amount, make the correction and continue processing the return. If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change.

    Taxpayers who receive a notice saying the IRS changed the amount of their 2020 credit should read the notice. Then they should review their 2020 tax return, the requirements and the worksheet in the Form 1040 and Form 1040-SR instructions

    Here are some common reasons the IRS corrected the credit:

    • The individual was claimed as a dependent on another person’s 2020 tax return.
    • The individual did not provide a Social Security number valid for employment.
    • The qualifying child was age 17 or older on Jan. 1, 2020.
    • Math errors relating to calculating adjusted gross income and any EIPs already received.

    IRS.gov has a special section - Correcting Recovery Rebate Credit issues after the 2020 tax return is filed – that provides additional information to explain what errors may have occurred. Taxpayers who disagree with the IRS calculation should review their letter as well as the questions and answers for what information they should have available when contacting the IRS.

    The Internal Revenue Service urges people who have not yet filed their 2020 tax return to properly determine their eligibility for the 2020 before they file their 2020 tax returns. To calculate any credit due, start with the amount of any EIPs received. Use the RRC Worksheet or tax preparation software. Taxpayers who didn’t save or didn’t receive  an IRS letter or notice can securely access their individual tax information with an IRS online account.

    Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File Program. The fastest way to get a tax refund which will include your 2020 RRC is to file electronically and have it direct deposited  into their financial account. Bank accounts, many prepaid debit cards and several mobile apps can be used for direct deposit when a routing and account number are provided. If using a prepaid debit card, check with the financial institution to ensure the card can be used and to obtain the routing number and account number, which may be different from the card number.

    For more information, visit IRS.gov.RRC and the frequently asked questions by topic.

  • 05 Apr 2021 12:47 PM | Anonymous

    WASHINGTON – Unclaimed income tax refunds worth more than $1.3 billion await an estimated 1.3 million taxpayers who did not file a 2017 Form 1040 federal income tax return, according to the Internal Revenue Service.

    “The IRS wants to help taxpayers who are due refunds but haven’t filed their 2017 tax returns yet,” said IRS Commissioner Chuck Rettig. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return.”

    The IRS estimates the midpoint for the potential refunds for 2017 to be $865 — that is, half of the refunds are more than $865 and half are less.

    In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. For 2017 tax returns, the window closes May 17, 2021, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date.

    The IRS reminds taxpayers seeking a 2017 tax refund that their checks may be held if they have not filed tax returns for 2018 and 2019. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.

    By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2017. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2017, the credit was worth as much as $6,318. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2017 were:

    • $48,340 ($53,930 if married filing jointly) for those with three or more qualifying children;
    • $45,007 ($50,597 if married filing jointly) for people with two qualifying children;
    • $39,617 ($45,207 if married filing jointly) for those with one qualifying child, and;
    • $15,010 ($20,600 if married filing jointly) for people without qualifying children.

    Current and prior year tax forms (such as the tax year 2017 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

    Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2017, 2018 or 2019 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can file Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return.

    First-time filers and EIP eligible
    The IRS reminds first-time filers and those who usually don’t have a federal filing requirement that they must file a 2020 tax return to claim the Recovery Rebate Credit (RRC), if they were eligible but did not receive the first or second Economic Impact Payment (EIP), or received less than the full amounts. The IRS offers free options to prepare and file a return at How to File on IRS.gov. Taxpayers who received the full amounts of both EIPs cannot claim the RRC and should not include any information about the payments on their 2020 tax return.

    State-by-state estimates of individuals who may be due 2017 income tax refunds

    State or

    Estimated

    Median

    Total

    District

    Number of

    Potential

    Potential

     

    Individuals

    Refund

    Refunds*

    Alabama

    21,700

    $848

    $21,542,300

    Alaska

    5,000

    $960

    $5,527,400

    Arizona

    32,900

    $766

    $30,655,500

    Arkansas

    12,600

    $811

    $12,150,900

    California

    132,800

    $833

    $129,793,500

    Colorado

    27,000

    $813

    $26,020,400

    Connecticut

    13,200

    $928

    $13,945,100

    Delaware

    5,200

    $853

    $5,254,600

    District of Columbia

    3,600

    $878

    $3,765,500

    Florida

    89,600

    $870

    $89,767,400

    Georgia

    46,300

    $791

    $44,234,300

    Hawaii

    7,600

    $913

    $7,827,400

    Idaho

    6,200

    $727

    $5,572,300

    Illinois

    49,000

    $901

    $50,355,300

    Indiana

    30,800

    $894

    $31,291,100

    Iowa

    13,500

    $922

    $13,851,800

    Kansas

    13,400

    $865

    $13,313,500

    Kentucky

    17,700

    $875

    $17,612,600

    Louisiana

    21,700

    $837

    $21,659,900

    Maine

    5,300

    $853

    $5,158,000

    Maryland

    26,700

    $872

    $27,241,700

    Massachusetts

    28,000

    $978

    $30,469,100

    Michigan

    43,100

    $863

    $43,189,300

    Minnesota

    20,400

    $808

    $19,400,200

    Mississippi

    11,800

    $776

    $11,087,800

    Missouri

    30,500

    $831

    $29,778,200

    Montana

    4,400

    $808

    $4,255,500

    Nebraska

    7,200

    $853

    $6,982,000

    Nevada

    15,500

    $845

    $15,310,600

    New Hampshire

    5,900

    $968

    $6,391,000

    New Jersey

    34,200

    $924

    $35,778,700

    New Mexico

    9,000

    $837

    $8,913,100

    New York

    66,700

    $956

    $71,361,600

    North Carolina

    43,500

    $837

    $42,307,200

    North Dakota

    3,600

    $958

    $3,779,100

    Ohio

    48,700

    $852

    $47,892,500

    Oklahoma

    19,800

    $869

    $19,890,300

    Oregon

    21,200

    $765

    $19,733,900

    Pennsylvania

    50,900

    $931

    $52,861,200

    Rhode Island

    3,600

    $921

    $3,792,500

    South Carolina

    16,800

    $768

    $15,740,900

    South Dakota

    3,600

    $912

    $3,665,500

    Tennessee

    27,100

    $851

    $26,534,100

    Texas

    133,000

    $904

    $138,355,200

    Utah

    11,100

    $771

    $10,251,900

    Vermont

    2,600

    $852

    $2,505,200

    Virginia

    36,600

    $827

    $36,159,900

    Washington

    36,900

    $928

    $38,924,900

    West Virginia

    6,400

    $946

    $6,769,600

    Wisconsin

    18,900

    $798

    $17,759,900

    Wyoming

    3,100

    $944

    $3,273,400

    Totals

    1,345,900

    $865

    $1,349,654,800

    * Excluding cred


  • 02 Apr 2021 3:46 PM | Anonymous

    Notice 2021-23 provides guidance on the employee retention credit provided under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act, as amended by section 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, for qualified wages paid after December 31, 2020, and before July 1, 2021.  Notice 2021-23 amplifies Notice 2021-20 and provides employers with guidance on how to determine their eligibility for and the amount of the employee retention credit they may claim for the first and second calendar quarters of 2021.

    Notice 2021-23 will be in IRB:  2021-16, dated April 19, 2021.


  • 02 Apr 2021 3:36 PM | Anonymous

    WASHINGTON – The Internal Revenue Service today issued guidance for employers claiming the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).

    Notice 2021-23 explains the changes to the Employee Retention Credit for the first two calendar quarters of 2021, including:

    • the increase in the maximum credit amount,
    • the expansion of the category of employers that may be eligible to claim the credit,
    • modifications to the gross receipts test,
    • revisions to the definition of qualified wages, and
    • new restrictions on the ability of eligible employers to request an advance payment of the credit.

    As a result of the changes made by the Relief Act, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after Dec. 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum employee retention credit available is $7,000 per employee per calendar quarter, for a total of $14,000 for the first two calendar quarters of 2021.

    Employers can access the Employee Retention Credit for the 1st and 2nd calendar quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers (i.e., employers with an average of 500 or fewer full-time employees in 2019) may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19, after reducing deposits. In 2021, advances are not available for employers larger than this.  Further details on how to calculate and claim the employee retention credit for the first two calendar quarters of 2021 can be found in Notice 2021-23.

    Under the American Rescue Plan Act of 2021, enacted March 11, 2021, the Employee Retention Credit is available to eligible employers for wages paid during the third and fourth quarters of 2021. The Department of the Treasury and the IRS will provide further guidance on the Employee Retention Credit available under the ARPA.

    Additional coronavirus relief information for businesses is available on IRS.gov.


  • 02 Apr 2021 3:26 PM | Anonymous

    WASHINGTON — The Internal Revenue Service today announced it is seeking civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP).

    The TAP is a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction.

    Taxpayers interested in serving on the panel may apply between April 5 and May 14.

    National Taxpayer Advocate Erin Collins recently expressed her appreciation for the contributions of TAP volunteers to improve the experience of U.S. taxpayers. “I am grateful to these citizens for volunteering their time and talent to the Taxpayer Advocacy Panel,” she said. “I am very proud of the accomplishments of the TAP last year, and I look forward to the TAP bringing its valuable taxpayer perspective in recommending changes to tax administration to achieve the quality service that taxpayers expect and deserve.”

    The TAP reports annually to the Secretary of the Treasury, the Commissioner of the Internal Revenue Service and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS that provides support for and oversight of the TAP.

    To the extent possible, the TAP includes members from all 50 states, the District of Columbia, Puerto Rico and one member representing international taxpayers. Each member is appointed to represent the interests of taxpayers in his or her geographic location as well as taxpayers overall. For the TAP, "international taxpayers" are broadly defined to include U.S. citizens working, living, or doing business abroad or in U.S. territories.

    The TAP is seeking members in the following locations: Arkansas, California, Connecticut, Delaware, Georgia, Idaho, International, Kentucky, Massachusetts, Michigan, Missouri, Minnesota, Montana, North Dakota, Nebraska, New Mexico, New York, Oklahoma, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia.

    The panel is seeking alternates in the following locations: Alabama, California, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Kentucky, Massachusetts, Michigan, Missouri, North Dakota, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Oregon, Rhode Island, Texas, Vermont, Wisconsin, West Virginia and Wyoming.

    Federal advisory committees are required to have a balanced membership in terms of viewpoints represented. As such, applicants from under-represented groups, such as Native Americans and non-tax professionals, are particularly encouraged to apply. All timely applications, however, will be given consideration.

    New TAP members will serve a three-year term starting in December 2021. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years.

    To be a member of the TAP, a person must be a U.S. citizen, be current with his or her federal tax obligations, be able to commit 200 to 300 volunteer hours during the year and pass a Federal Bureau of Investigation criminal background check. Members cannot be federally registered lobbyists. Current Department of the Treasury or IRS employees cannot serve on the panel, and former Department of the Treasury or IRS employees and former TAP members must have a three-year separation from their service to be considered for appointment. Tax practitioner applicants must be in good standing with the IRS (meaning not currently under suspension or disbarment).

    For additional information about the TAP or the application process, visit www.improveirs.org or call 888-912-1227 (a toll-free call) and select prompt number five. Callers outside the U.S. may call 214-413-6523 (not a toll-free call) or email the TAP staff at taxpayeradvocacypanel@irs.gov.

    A video is available with more information about the TAP and about how to contribute to this dynamic group of volunteers.


  • 02 Apr 2021 8:13 AM | Anonymous

    WASHINGTON — Today, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing several million more payments in the third batch of Economic Impact Payments from the American Rescue Plan. This brings the total disbursed so far to more than 130 million payments worth approximately $335 billion.

    As announced on March 12, Economic Impact Payments continue to roll out in batches to millions of Americans. The third batch of payments began processing on Friday, March 26, with an official payment date of March 31, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:

    • 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. These “plus-up” payments could include a situation where a person’s income dropped in 2020 compared to 2019, or a person had a new child or dependent on their 2020 tax return, and other situations.
    • The payments announced today also include payments for people for whom the IRS previously did not have information to issue a payment but who recently filed a tax return and qualify for an Economic Impact Payment.  Payments to this group -- and the “plus-up” payments noted above -- will continue on a weekly basis going forward, as the IRS continues processing tax returns from 2020 and 2019.
    • In total, this third batch includes more than 4 million payments, with a total value of more than $10 billion.
    • This batch of payments contains more than 2 million direct deposit payments (with a total value of more than $5 billion) and approximately 2 million paper check payments (with a total value of nearly $5 billion).

    For the first two batches of payments (which began processing on March 12 and March 19), payments were primarily sent to eligible taxpayers who filed 2019 or 2020 returns. People who don't typically file a return but who successfully used the Non-Filers tool on IRS.gov last year were also sent payments in these first two batches, either as a direct deposit or by paper check or an EIP Card, a prepaid debit card.

    Starting Friday, a large set of payments will begin going to Social Security and other federal beneficiaries who didn’t file a 2020 or 2019 tax return and didn’t use the Non-Filers tool last year. These payments will go to Social Security retirement, survivor or disability (SSDI), Supplemental Security Income (SSI), and Railroad Retirement Board (RRB) beneficiaries. As announced previously, these payments will begin to be issued this weekend, with the projection that the majority of these payments will be sent electronically and received on April 7.

    No action is needed by most people to obtain this round of Economic Impact Payments. People can check the Get My Payment tool on IRS.gov on to see if the their payment has been scheduled. The IRS notes that the Get My Payment tool on IRS.gov will not be updated until the weekend of April 3-4 with information for Social Security and other federal beneficiaries expecting payments next week.

    The IRS continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon. Currently, the IRS estimates that Economic Impact Payments for VA beneficiaries who do not regularly file tax returns could be disbursed by mid-April. VA beneficiary payment information will be available in the Get My Payment tool at a future date.

    Special reminder for those who don't normally file a tax return

    Some federal benefits recipients may need to file a 2020 tax return, even if they don't usually file, to provide information the IRS needs to send payments for any qualified dependent. Eligible individuals in this group should file a 2020 tax return to be considered for an additional payment for their qualified dependent as quickly as possible.

    People who don't normally file a tax return and don't receive federal benefits may qualify for these Economic Impact Payments. This includes those experiencing homelessness, the rural poor, and others. For those eligible individuals who didn't get a first or second Economic Impact Payment or got less than the full amounts, they may be eligible for the 2020 Recovery Rebate Credit, but they’ll need to file a 2020 tax return. See the special section on IRS.gov: Claiming the 2020 Recovery Rebate Credit if you aren't required to file a tax return.

    Free tax return preparation is available for qualifying people.

    The IRS reminds taxpayers that the income levels in this new round of Economic Impact 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 payments end at $80,000 for individuals ($160,000 for married filing jointly); people with Adjusted Gross Incomes above these levels are ineligible for a payment.

    Individuals can check the Get My Payment tool on IRS.gov to see the payment status of these payments. Additional information on Economic Impact Payments is available on IRS.gov.


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