The federal government will issue the first batch of $1,400 stimulus checks to Americans who gave direct deposit information when they filed taxes for 2019 or 2020, a Treasury Department official confirmed to NBC.
The $1.9 trillion American Rescue Plan offers one-time direct payments to those who qualify — the third round of stimulus checks since the pandemic began.
The House passed the Covid relief bill on Wednesday.
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President Joe Biden is expected to sign the legislation by the weekend, when unemployment benefits are slated to lapse for millions of people. The Senate passed the bill last Saturday.
The IRS will start issuing $1,400 checks this month, Biden said Saturday.
The initial group of recipients will be followed by taxpayers who didn’t provide direct-deposit information but for whom the IRS has payment information from other programs.
The IRS will be able to send money electronically for taxpayers who filed returns with direct deposit or bank account information. The government will send paper checks or debit cards to those households for which Treasury cannot determine a bank account.
The IRS will use information on 2020 tax returns to determine eligibility and check amount. The agency will use 2019 record for households that haven’t yet filed their taxes this year — including people who used the “non-filer portal” for previous rounds of payments.
The legislation offers full $1,400 payments to those with adjusted gross income of up to $75,000 for individuals, $112,500 for heads of household and $150,000 for married couples who file a joint tax return.
The payments are reduced for those with income above those thresholds. Payments will be capped at individuals earning $80,000 in income, heads of household with $120,000 and married couples with $160,000.
For those who lost their jobs, the timing of filing a tax return has been complicated by a newly offered tax break on unemployment benefits.
The relief measure waives taxes on up to $10,200 of jobless benefits individuals received last year. That offers an incentive to delay filing 2020 tax returns. However, since a loss of income in 2020 may make someone eligible for a stimulus check, there may be an urge to file a tax return quickly to reflect that income to the IRS.
Source: Finance - cnbc.com
