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IRS Now Sending Out Third Round of Economic Impact Payments

It won’t be long before Americans start seeing the third round of Economic Impact Payments—also known as EIP3—showing up in their bank accounts and mailboxes.

The Internal Revenue Service is sending direct deposit payments first; some recipients could see their deposit by the weekend. No action is needed by most taxpayers, but they can use the Get My Payment tool on IRS.gov to check on the status of their EIP3.

How will the EIP3 rollout work?

  • Most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return.
  • EIP3s are based on the taxpayer’s latest processed tax return from 2019 or 2020. This includes those who successfully registered online at IRS.gov, using the Non-Filers tool last year, or submitted a special simplified tax return to the IRS.
  • If the IRS has received and processed a taxpayer’s 2020 return, that’s the one that will be used to calculate the Economic Impact Payment.
  • The IRS will automatically send an EIP3 to people who did not file a return, but receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs benefits.
  • Payment levels have changed from previous EIPs. Payments will be reduced for those making $75,000 or more in Adjusted Gross Income ($150,000 for married filing jointly.) The phase-out ends at $80,000 for individuals and $160,000 for married filing jointly. People making more will be ineligible for EIP3.

What’s different in EIP3?

First, most people will see larger payments this time around. Most families will get $1,400 per person. This includes all dependents listed on their tax return—not just those under age 17 as in previous payments.

EIP3 includes dependents such as older relatives like college students, adults with disabilities, parents and grandparents.

The American Rescue Plan Act of 2021, the enabling legislation that makes all this possible, also seeks to keep the relief ball rolling with changes to important tax credits. These changes will be claimed on tax returns filed in 2022.

What else is in the American Rescue Plan Act of 2021?

Be sure to check out “The American Rescue Plan Includes Funding for Individual Payments, Changes to Tax Credits,” the Taxing Subjects blog that outlines changes to tax credits, like the child tax credit, the earned income tax credit, and the premium tax credit.

Sources: “IRS begins delivering third round of Economic Impact Payments to Americans,” IRS.gov; “More details about the third round of Economic Impact Payments,” IRS.gov

Story provided by TaxingSubjects.com