Stimulus Update: 4 Things That Could Prevent You From Receiving Another Direct Stimulus Payment

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Congress has yet to put the finishing touches on a third direct stimulus payment to the American public, but enough details have leaked to give us a fair idea of what we can expect this time around. If you're one of the millions of Americans who need a fresh influx of cash to pay your bills, this check matters to you. Take a quick look at these four issues that could prevent you from receiving a direct payment and decide what you want to do about anything standing in your way.

1. You've moved

If you haven't filed your 2020 tax return yet, the only address the IRS has for you is the one listed on your 2019 return. If you opted to have a 2019 tax refund direct deposited into your bank account and still have that account, you should be fine. The IRS will make the next direct payment deposit into the same account. However, if the IRS mailed a paper check or debit card to your old address last time, they're going to mail another paper check or debit card this time -- to the old address. You can rectify the situation by:

  • Filing your 2020 tax return as soon as possible. Your latest return will give the IRS a record of your new address. Also, if you earned less in 2020 than in 2019, it could be easier for you to qualify for this round of direct payments.
  • Download Form 8822 from the IRS website. Once you fill out the change of address form, mail it to the address listed on the form.
  • Inform the IRS in writing. If you don't have access to a printer or would rather write a letter, let the IRS know you've moved by providing the following information:
    • Your full name
    • Your old address
    • Your new address
    • Your Social Security number or Individual Taxpayer Identification Number
    • Your signature

If you filed a joint return in 2019, provide all required information and signatures for you and your spouse.

2. You've changed banks

Whether you've moved residences or not, you may have changed banks since the last time the IRS deposited a tax refund. If so, the new direct payment will be sent to the last bank on record. By law, banks must return payments sent to closed accounts back to the IRS.

Your best bet may be to get your 2020 tax return filed as quickly as possible (provided you have all the documentation you need to file an accurate return). If that's not possible, file for a Recovery Rebate Credit when you fill out your 2020 return. If you're owed a refund, the IRS will add the amount of the direct stimulus to your refund. If you owe taxes for 2020, the IRS will deduct the amount of the stimulus check from the total taxes due.

3. Your marital status has changed

If you and your spouse have separated or divorced since the last time you filed taxes, and now live in separate residences, the IRS needs to know. If your last direct payment was mailed to your home and one of you still lives in that residence, that's where the stimulus check will be mailed. If that's your ex, quickly let the IRS know that you live somewhere new.

4. You didn't qualify in 2019, but do now

Although it's not written in stone, it looks like this round of direct payments will be similar to the first two rounds. Here's a breakdown of who would receive a full stimulus payment of $1,400 per eligible family member:

Filing Status Adjusted Gross Income (AGI)
Single tax filer Up to $75,000
Head of household Up to $112,500
Married couple filing jointly Up to $150,000

Let's say you are single and earned $100,000 in 2019, but COVID-19 caused your business to close for a time and you ended up with an AGI of $60,000 in 2020. If you haven't filed your 2020 tax return yet, now is the time to do it. There's no reason to miss out on a direct stimulus payment if you need it but don't qualify because the IRS is using an older tax return to determine eligibility.

Congress is still hammering out the details, like how much Americans earning more than these limits might receive and at what income they are no longer eligible for any funds. We know that the upper limit will likely be lower this time around than it was when the first two stimulus payments went out, but are still waiting for lawmakers to settle on an amount.

In the meantime, if any of these four issues apply to you, take steps to rectify them before Congress passes the stimulus proposals into law and the IRS begins sending checks out the door. And if your finances were hit hard by the pandemic, visit our coronavirus hardship loan guide to learn if you might qualify for a hardship loan.

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