08/17/2020
The Internal Revenue Service issued additional guidance on the Economic Impact Payment for some eligible individuals. Here is the information.
IRS REOPENS EIP REGISTRATION PERIOD FOR CERTAIN RECIPIENTS OF FEDERAL BENEFITS
IR 2020-180, 8/14/2020
In a News Release, IRS has provided several updates regarding the economic impact payments (EIPs) provided by the CARES Act. Among the updates is that IRS is reopening the registration period for certain persons who receive federal benefits (e.g., Social Security benefits) but who didn’t receive $500-per-child payments earlier this year.
Background. As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, PL 116-136, 3/27/2020), IRS made EIPs to certain taxpayers. The eligibility for EIPs and the amount of EIPs are generally dependent on the taxpayer's 2019 federal income tax return or, if he didn't file that return by the time IRS determined his eligibility, his 2018 federal income tax return. Parents receive $500 for each qualifying child under the age of 17 as of the end of 2020.
To facilitate the payment of EIPs, IRS created a new on-line tool that "non-filers" can use to register for their EIPs ("Non-Filers tool"). (IR 2020-69, 4/10/2020)
IRS created deadlines for the use of the Non-Filers tool by persons who receive federal government benefits, have children, and weren't required to file a tax return in 2018 or 2019.
For example, there was a May 5 deadline for those persons whose government benefits were either Supplemental Security Income (SSI) or Veterans Affairs (VA) benefits. (IR 2020-81, 4/24/2020; see May 5 EIP deadline for VA, SSI recipients with dependent children)
IRS’s "Get My Payment" tool:
a. Shows taxpayers either their economic impact payment (EIP) amount and the scheduled delivery date of the EIP by direct deposit or paper check, or that a payment hasn’t been scheduled; and
b. Allows taxpayers who did not use direct deposit on their last filed tax return to provide their direct deposit information which will speed their receipt of their EIP.
See IRS creates website to help persons entitled to economic impact payments.
IRS reopens registration period. IRS is reopening the registration period for certain persons who receive federal benefits but who didn’t receive $500-per-child payments earlier this year. Those recipients should use the Non-Filers tool starting Aug. 15 through Sept. 30 to enter information on their qualifying children to receive the supplemental $500 payments.
Those eligible to provide this information include people with qualifying children who receive Social Security retirement, survivor or disability benefits, SSI, Railroad Retirement benefits (RRB), and VA Compensation and Pension benefits, and did not file a tax return in 2018 or 2019.
IRS anticipates that these "catch-up payments," equal to $500 per eligible child, will be issued by mid-October.
Other updates. The News Release provided the following additional updates:
Government benefit recipients. For those Social Security, SSI, VA, and RRB beneficiaries who have already used the Non-Filers tool to provide information on children, no further action is needed. IRS will automatically make a payment in October.
Anyone who filed or plans to file either a 2018 or 2019 tax return should file the tax return and not use this tool.
Those unable to access the Non-Filers tool may submit a simplified paper return.
Any beneficiary who misses the Sept. 30 deadline will need to wait until next year and claim the EIP as a credit on their 2020 federal income tax return.
Those who received their original EIP will also have any supplemental payment direct deposited to the same account. Others will receive a check.
Eligible recipients can check the status of their payments using the Get My Payment tool. In addition, a notice verifying the $500-per-child supplemental payment will be sent to each recipient and should be retained with other tax records.
Other nonfilers. People with little or no income and who are not required to file tax returns remain eligible to receive an EIP. People in this group should also use the Non-Filers tool – but they need to act by Oct. 15 to receive their payment this year. Anyone who misses the Oct. 15 deadline will need to wait until next year and claim the EIP as a credit on their 2020 federal income tax return.
Spouse's past-due child support. IRS is actively working to resolve cases where a portion or all of an individual's payment was taken and applied to their spouse's past-due child support. People in this situation do not need to take any action. IRS will automatically issue the portion of the EIP that was applied to the other spouse's debt.
Spouses of deceased taxpayers. Upon enactment of the CARES Act, IRS initially implemented the legislation consistent with processes and procedures relating to the 2008 stimulus payments (which were transmitted to deceased individuals). After further review this spring, IRS determined that those who died before receipt of the EIP should not receive the advance payment. As a result, the EIP procedures were modified to prevent future payments to deceased individuals.
The cancellation of uncashed checks is part of this process. Some EIPs to spouses of deceased taxpayers were canceled. IRS is actively working on a systemic solution to reissue payments to surviving spouses of deceased taxpayers who were unable to deposit the initial EIPs paid to the deceased and surviving spouse. For EIPs that have been canceled or returned, the surviving spouse will automatically receive their share of the EIP.
References: For information about EIPs, see FTC 2d/FIN ¶A-4460; United States Tax Reporter ¶64,284.
