The IRS has begun sending out Economic Impact Payments. Some people have received payment amount which is different than what they expected. Payment amounts will vary based on income, filing status, and family size.
Here are some examples and reasons why you may have received a different payment amount than expected:
- You have not filed a 2019 tax return, or the IRS has not finished processing your 2019 return
If you did not file your 2019 return than the IRS will the 2018 return to calculate the payment. If the IRS has to use the 2018 return, various life changes from 2019 would not be reflected in the payment. Life changes could include increasing income, birth, or adoption of child. In many cases the additional amount would available in the 2020 tax return.
If the IRS is still processing the 2019 return due to any issues, they will calculate the payment based on the 2018 return.
- Claimed dependents are not eligible for an additional $500 payment
To receive the additional $500 payment amount dependents must meet the following qualifications
- Be related to you, be adopted your adopted child, your foster child, your younger sibling, grandchild, niece or nephew
- You must provide more than half the child’s support
- The child must live with you more than half of the year
- Child must have a valid Social Security number (SSN) or an Adoption Taxpayer Identification Number (ATIN)
- Child must be under 17 years of age
- Child must be a U.S. citizen, permanent resident or qualifying resident alien
- Dependents are college students
College student does not qualify for the Economic Impact Payment if they can be claimed on their parents return.
However, If a student cannot be claimed on their parents or anyone else’s return than they may be eligible to $1,200 credit for the 2020 tax return.
- Claimed dependents are parents or relatives, age 17 or older
Dependent that is 17 or older, other relatives and parents do not qualify for the payment.
However, if the parent or other relative cannot be claimed as a dependent on the taxpayer’s or anyone else’s return for 2020, the parent or relative may be eligible to individually claim a $1,200 credit on their 2020 tax return filed next year.
- Past-due child support was deducted from the payment
The Economic Impact Payment is offset only by past-due child support. You will be notified by The Bureau of the Fiscal Service if this applies to you.
If you filed married filing jointly or filed an injured spouse claim with their 2019 tax return (or 2018 tax return if they haven’t filed the 2019 tax return), half of the total payment will be sent to each spouse. Only the payment of the spouse who owes past-due child support should be offset.
- Garnishments by creditors reduced the payment amount
Federal tax refunds, including the Economic Impact Payment, are not protected from garnishment by creditors by federal law once the proceeds are deposited into a taxpayer’s bank account.
- What if the amount of my Economic Impact Payment is incorrect?
Everyone should review the eligibility requirements for their family to make sure they meet the criteria.
In many cases, if you received a smaller-than-expected Economic Impact Payment you may qualify to receive an additional amount early next year when they file their 2020 federal income tax return. Economic Impact Payments are technically an advance payment of a new temporary tax credit that you are eligible to claim on their 2020 return.
When you file your return next year, you may be able to can additional credits on your 2020 tax return if they are eligible for them. The IRS will provide further details on IRS.gov on the action they may need to take.
The Economic Impact Payment will not reduce your refund or increase the amount you owe when you file a tax return early next year. It is also not taxable and should not be included in income on a 2020 return.
More resources on Economic Impact Payments here:
