COVID-19 Coronavirus Economic Impact Payments / Stimulus Checks

Third Round of Stimulus Money — from the American Rescue Plan

The 2021 stimulus payment

On March 11, 2021, the American Rescue Plan was signed into law. It called for sending a third round of stimulus checks (called Economic Impact Payments - EIP) to Americans. The American Rescue Plan authorized a $1,400 stimulus payment to eligible people. Learn more about it on the IRS website.Payments were based on income reported on 2019 or 2020 tax returns.

How much money will I get?

• Adults whose adjusted gross income is less than $75,000/year (or couples who file together whose adjusted gross income is less than $150,000) will get $1,400 for each adult, plus $1,400 for each dependent — no matter how old they are. This applies to heads of households who make less than $112,500, as well.
• The IRS will use income information from your 2020 tax return if they received that return before sending your money. Otherwise they will use information from your 2019 tax return.
• If the IRS sends your payment based on a 2019 return and then your 2020 return says you qualify for more (perhaps you had a baby), they will send an additional payment to make up for the difference. To get the additional payment, you must file the 2020 tax return by 90 days from the filing deadline or September 1, 2021, whichever is earlier.

How do I get the stimulus payment?

• The stimulus payments were processed by the IRS.
• Most people already received their payments, which were based on income reported on their 2019 or 2020 tax return.
• The payment is actually a 2021 tax credit that is being sent to you in advance.

How do I check on my payment?

• Use the IRS "Get My Payment" tool to check on the status of your Economic Impact Payment. It will let you know when the IRS is depositing your payment or mailing it. Information is updated every night.

What if I get Social Security, VA or Railroad Retirement?

The IRS sent automatic payments to qualifying individuals who, as of January 1, 2020, were receiving Social Security, Veterans or Railroad Retirement benefits. If you didn’t get a payment for dependents, you may need to file a 2021 tax return to claim it.

When will I get the payment? And what can I do if I don’t get it?

We believe the IRS will continue to send the third round of payments until December 2021. Because this third round of stimulus is actually an advance payment of a tax credit for tax year 2021, you should be able to claim this credit on your 2021 tax return if you do not get it by the end of 2021.

How do I get help filing a tax return to claim my EIP?

• The IRS recommends electronic filing, and we agree. It is a faster, more secure option. Paper forms will take much longer to be processed by IRS. You may qualify for free e-file software.
• You can also call the Vermont 2-1-1 hotline and follow the menu options for tax preparation. Through this service you may be able to schedule an appointment with a free Volunteer Income Tax Preparation Assistance (VITA) site. These sites are staffed by trained volunteers. They provide free preparation services to taxpayers who meet eligibility requirements.
• Also, you can find Form 1040 and Form 1040 instructions on the IRS website. 

Will the stimulus check affect my benefits? 

The stimulus money will not count as “income” and will not reduce your SSI, Reach Up, subsidized housing, Medicaid or 3SquaresVT (food stamps). The money also will not count as a “resource” as long as you spend it within a year.

I get SSI. Should I spend the stimulus money within a year? What can I spend it on?

Spend down your CARES Act EIP money before 12 months have passed since receiving the payment. You are not limited in what you can spend the money on. You can spend down on whatever you wish, including on gifts and charitable contributions. If you don't spend it within 12 months, the Social Security Administration will count the money as a “resource.”

Will I be taxed on the stimulus check in any way? 

No. The stimulus money will not count as “income.” 

Can my stimulus check be taken from me to pay a debt or child support?

No. The payment cannot be taken from you to pay past-due child support.

Can my stimulus check be taken from me to pay a debt?

The American Rescue Plan law specifically exempts the stimulus payments from state or federal debt offset. However, private debt collectors could still seek out these funds.

Can a nursing home or assisted living facility take the payment from me?

No. If you qualify for a payment, it’s yours to keep. If a loved one qualifies and lives in a nursing home, residential care home or assisted living facility, it’s theirs to keep. The facility may not put their hands on it or require somebody to sign it over to them. Even if that somebody is on Medicaid.

What about people with ITINs?

You still need a work-authorizing Social Security Number (SSN) to be eligible for this stimulus. However, there are important changes since the first round of stimulus checks.

• In the first stimulus rollout, any non-SSN holder on a joint return made everyone on that return (even SSN holders) ineligible. Big change: The new rounds of stimulus has corrected this problem. If you filed a joint return with a non-SSN holder, you are still eligible for the stimulus. See the below hypotheticals.
  • Situation: A single tax filer has an Individual Taxpayer Identification Number (ITIN) but no Social Security number (SSN).
    • This person is ineligible for the stimulus.
  • Situation: A spouse has a Social Security number (SSN) and files “married filing jointly” on a tax return with a spouse who has an ITIN.
    • The SSN holder is now eligible to get a payment. If they have children on the tax return that have SSNs, these children will be eligible for the payment for each qualifying child.
  • Situation: Two ITIN holders file a joint return and claim young children who have SSNs.
    • The children (dependents) who have SSNs are eligible for the payment.

Second Round of Stimulus Money — from the CRRSA Act

On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act) was signed into law. It called for sending a second round of stimulus checks (called Economic Impact Payments - EIP) to Americans. The IRS sent out the money.

How much money will I get?

• Adults whose modified adjusted gross income is less than $75,000/year (or couples who file together whose modified adjusted gross income is less than $150,000) will get $600 for each adult, plus $600 for each child under 17 who lives with you and depends on you. This applies to heads of households who make less than $112,500, as well.
• For people with higher incomes, the amount of stimulus check goes down at a rate of $5 per $100 of additional income.
• To figure your modified adjusted gross income (MAGI), look at your recent federal tax return. MAGI is your adjusted gross income (AGI) from your tax return, plus foreign income, plus tax-exempt interest, plus non-taxable Social Security benefits. For most people, MAGI is the same as AGI.

How do I get it?

• The stimulus payments will be processed by the IRS.
• If you have already filed a 2019 tax return, you will get the stimulus payment automatically. You will receive it in the same form as your tax refund. If you requested direct deposit, then the stimulus will be direct deposited. If you requested a paper check, then the stimulus will be mailed to the same address on your 2019 tax return.
• If you entered your information into the IRS non-filer portal earlier in 2020, you will get the stimulus payment automatically. You do not have to do anything.
• If you receive one of the following benefits, you will get the stimulus payment automatically. You do not have to do anything.
  • Social Security
  • Social Security Disability (SSDI)
  • Supplemental Security Income (SSI)
  • Veterans Affairs (VA)
  • Railroad Retirement
• Note: Instead of a check, some people will get a debit card mailed to them in a white envelope. The envelope has the U.S. Department of the Treasury seal on it.

When should I get my payment?

The IRS was given hard and fast deadlines to send the two rounds of Economic Impact Payments out to American families. The first round of payments had to be sent out by December 31, 2020. The second round had to be sent out by January 15, 2021.

What this means: If you have not received the first or second round of payments yet, then you will not be getting them in advance. The good news is that you can still do something to get these payments. Read below.

What can I do if I have not received my EIP money by those deadlines?

If you have not received all or some portion of your Economic Impact Payments (whether your own payment or those for your dependents under age 17) by the deadlines above, you will have to file a 2020 tax return (Form 1040) and claim these amounts. You claim them on line 30 of the 2020 Form 1040 as a "Recovery Rebate Credit". This is another name for the EIP stimulus payments. If you did not get all or a portion of the EIP payments in advance, then you can claim them on line 30 of your tax return for 2020.

How do I get help filing a 2020 tax return to claim my EIP?

The IRS recommends electronic filing, and we agree. It is a faster, more secure option. Paper forms will take much longer to be processed by IRS. You may qualify for free e-file software.

You can also call the Vermont 2-1-1 hotline and follow the menu options for tax preparation. Through this service you may be able to schedule an appointment with a free Volunteer Income Tax Preparation Assistance (VITA) site. These sites are staffed by trained volunteers. They provide free preparation services to taxpayers who meet eligibility requirements.

Also, you can find Form 1040 and Form 1040 instructions on the IRS website. The instructions for the "Recovery Rebate Credit" are found on pages 57 - 59.

What if my spouse or ex-spouse took my payment?

If you did not get all or some portion of your Economic Impact Payments (whether your own payment or those for your dependents under age 17) you can file a 2020 tax return (Form 1040) and claim these amounts on line 30 of the form. The IRS is referring to this as the “recovery rebate” and will allow you to claim any of the EIPs that you did not get in advance. You may get a denial letter from the IRS, but that is the opportunity to reply (within 60 days) and explain your situation to the IRS. In this situation, Vermonters with a low income can contact us for help at the Vermont Low-Income Taxpayer Clinic (LITC) by filling out our form or calling 1-800-889-2047. 

Will the stimulus check affect my benefits? 

The stimulus money will not count as “income” and will not reduce your SSI, Reach Up, subsidized housing, Medicaid or 3SquaresVT (food stamps). The money also will not count as a “resource” as long as you spend it within a year. 

Will I be taxed on the stimulus check in any way? 

No. The stimulus money will not count as “income.” 

Can my stimulus check be taken from me to pay a debt or child support?

No. These payments will not be subject to garnishment or levy by private creditors or debt collectors. Also, these payments cannot be taken from you to pay past-due child support.

Can a nursing home or assisted living facility take the payment from me?

No. If you qualify for a payment, it’s yours to keep. If a loved one qualifies and lives in a nursing home, residential care home or assisted living facility, it’s theirs to keep. The facility may not put their hands on it or require somebody to sign it over to them. Even if that somebody is on Medicaid.

What about people with ITINs?

You still need a work-authorizing Social Security Number (SSN) to be eligible for this stimulus. However, there are important changes in this second round of stimulus checks.

• In the prior stimulus rollout, any non-SSN holder on a joint return made everyone on that return (even SSN holders) ineligible. Big change: This new round of stimulus has corrected this problem. If you filed a joint return with a non-SSN holder, you are still eligible for the stimulus. See the below hypotheticals.
  • Situation: A single tax filer has an Individual Taxpayer Identification Number (ITIN) but no Social Security number (SSN).
    • This person is ineligible for the stimulus.
  • Situation: A spouse has a Social Security number (SSN) and files “married filing jointly” on a 2019 tax return with a spouse who has an ITIN.
    • The SSN holder is now eligible to get a payment. If they have children on the tax return that have SSNs, these children will be eligible for the $600 for each qualifying child.
  • Situation: Two ITIN holders file a joint return and claim young children who have SSNs.
    • No one is eligible for the stimulus, because there needs to be at least one eligible adult filer on the joint return
• A retroactive change: When the CARES Act was passed in March 2020, any SSN holders who were filed on a joint return with an ITIN holder were ineligible for the $1,200 per person and $500 per child. However, this new legislation changes that section of the CARES Act. Now that family would be eligible for the CARES Act payments. We’re still learning how these payments will be made. But if you don’t see one before January 30, you should assume that you will have to file your 2020 tax return and claim the Cares Act EIP credit on that return.