Third stimulus check could arrive during tax season. Here’s what that means for youFebruary 19, 2021
In an attempt to finalize President Joe Biden’s marking up the proposal on Monday, Feb. 22. That timeline tracks with the of arriving for right in the middle of . That means, just as the IRS is processing , it would also start .by the middle of March, the House Budget Committee is set to begin
This may leave you wondering: When should I file my taxes? Will the IRS use my 2019 orto determine my ? What happens if I don’t file in time? Will this ? And what if my third check never arrives, or the amount is incorrect?
We’ve got answers for you based on what we know from the most. We won’t know anything for sure, however, until we can read the final language in a new bill. We’ll continue to update this story.
Why your third stimulus check could arrive during tax season
House Speaker Nancy Pelosi said she expects Congress to have a final bill ready for Biden to sign into law by March 14, which is when. If Congress follows that timeline (which it may, due to to push through Republican opposition), a during tax season, which has begun already and lasts .
This makes things a bit more complicated. For one, the IRS is already including. It also means the IRS will likely use whichever tax return they have on file most recently (more below.)
Will the third stimulus check be based on 2019 or 2020 taxes?
The most recent Democratic proposal (PDF) states the IRS would determine your total third stimulus payment based on your , from either your — whichever the IRS has most recently on file at the time of payment.
There may be several implications to this. For example, if you earned more in 2020 than in 2019, but the IRS uses your 2019 return (and gives you more stimulus money than you might be eligible for), you won’t have to return that money (more below).
The IRS is now accepting 2020 tax returns. We recommend filing your taxes as soon as possible for several reasons. The earlier you file, the(you can ) and any on your return. You’ll also have a chance to , or fix any errors, which could .
What’s the situation if you made more money in 2020, but the third check is based on your 2019 taxes?
The most recent proposal says the following:
Taxpayers receiving an advance payment that exceeds their maximum eligible credit based on 2021 tax return information will not be required to repay any amount of the payment to the Treasury. If a taxpayer’s 2021 tax credit exceeds the amount of the advance payment, taxpayers can claim the difference on their 2021 tax returns.
Therefore, if youbased on , but the IRS issued your check based on your 2019 taxes, you could claim the difference a year from now on your 2021 tax return — much like the current for from the first two rounds.
On the other hand, this also means that if you qualify for the full stimulus payment based on your 2019 taxes, but do not qualify based on your 2020 taxes, and if the IRS used your 2019 return, you won’t have to pay the IRS back for that discrepancy.
What happens if your third stimulus check never arrives, or if any money is missing?
Once a final bill is approved, if you’re eligible to receive a third stimulus check, but yours never arrives by, or , you’ll likely have to take another step to claim that money. This happened to millions of people during the first and second round of payments for , including IRS errors, out-of-date banking information or and to get the IRS their information.
Much like with the first and second checks, you’ll be able to claim any missing money from the third check owed to you or your dependents during tax season next year, 2022. That’s a long way away. The best thing to do right now to make sure your third check does arrive on time is to, even if you don’t usually have to file one.
For more, check out what we know so far about aand this time around.