The year 2020 came jam-packed with disruptions that, for many people, would disrupt our work-life balance, physical and mental health, and create new conventions for every aspect of our daily lives. As we now find ourselves in the pandemic year’s wake, don’t get blindsided by the latest tax law alterations. One major consideration, in addition to the child tax credit and other changes, is the assistance you and your family received in the form of Economic Impact Payments.
It’s important to know how much you received through the Economic Impact Payments (stimulus checks) throughout the challenging year that was 2020, and in January 2021. Don’t worry - stimulus checks aren’t taxable income. However if you didn’t receive a payment and you should have, or your income decreased in 2020, you may be eligible for a tax credit.
What if I’m not sure the amount of my payments?
Knowing exactly how much you received in Economic Impact Payments is crucial, as it may lower your tax obligation, or qualify you for a tax rebate. The IRS has created a free-to-use tool on their website that allows you to view the amount you owe, see payment history and your EIP payments, receive digital copies of select IRS notices and even make payments. This tool will be updated shortly with new information regarding the Rescue Plan of 2021, signed into law by President Biden on March 11, 2021.
In the event there’s some discrepancy about which payments you received, you may be wondering:
What if the IRS says they sent a payment, but I never received it?
In this event, claiming a tax credit for the missing amount won’t afford you the payment you’re hoping to receive. If you were indeed entitled to an EIP that you didn’t receive, you’ll need to initiate a Payment Trace by filing form 3911, or by calling 1-800-919-9835. This request can take up to six weeks to process, as the IRS will need to verify your address by sending a physical letter. So, if you were eligible for an EIP and didn’t receive the payment - act quickly! If you’re unsure of your eligibility, reach out to a tax expert for assistance.
The past year has underlined the importance of being prepared for what can, and cannot be foreseen. Angolano & Company will gladly assist any individual in minimizing and preparing their tax payments, and parsing out any payments the IRS may owe to you.