by Angelica Leicht | April 7, 2021
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Will you be getting extra money for this round of stimulus payments? You might be. Here's why the IRS is sending out more cash to some stimulus recipients.
The IRS is sending out another batch of direct stimulus payments to qualifying Americans this week as part of President Joe Biden's American Rescue Plan, a bill that was signed into law in mid-March. As of April 1, 2021, more than 130 million stimulus checks had been mailed or deposited into qualifying recipients' bank accounts across the nation, according to the IRS. This new batch of checks will add millions more to the count.
While not everyone who qualifies has received their payment yet, the federal agency has still made impressive headway on the distribution of these funds. Roughly $335 billion worth of stimulus payments had been made as of April 1; this new batch will add another $10 billion to the mix. This money will help Americans who have faced serious economic hardships due to the pandemic to pay for their rent or mortgages, monthly bills, and other essentials.
What's unusual about this round of checks, though, is that while a large portion will be going to those who get Social Security and Railroad Retirement benefits -- two groups whose payments had been delayed up to this point -- there is also money going toward supplemental payments for some Americans. These payments, known as "plus-up" payments, are adding more desperately-needed cash flow to the mix for some households. If you're wondering who is eligible for these supplemental payments or want to know when they'll arrive, we've got answers below.
According to the IRS, plus-up payments are "the first of ongoing supplemental payments for people who earlier in March received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns."
Because most people had not filed their 2020 tax returns by mid-March, when the third stimulus payments started rolling out, a large portion of the third stimulus payments were made based on 2019 tax information.
As we know, though, circumstances changed drastically for many people between 2019 and 2020 due to the pandemic or other life changes, so there are people who are eligible for more money after filing their tax returns for 2020.
Rather than asking those who qualify for more stimulus money based on their 2020 tax returns to file for a rebate or credit, the IRS is issuing them a "plus-up" payment instead. This extra money is not a bonus -- it's extra stimulus money that recipients would have been eligible for if their stimulus payment had been issued based on last year's income, not income from the year prior.
In order to qualify for a plus-up payment, you had to have a significant change in personal circumstances or income from 2019 to 2020 that would qualify you for more money.
"These payments could include a situation where a person's income dropped in 2020 compared to 2019, or a person had a new child or dependent on their 2020 tax return, and other situations," according to the IRS website.
In general, there are three different reasons you may qualify for a plus-up payment. These include:
If your income declined dramatically from 2019 to 2020 -- as was the case for many people due to layoffs, job closings, or other pandemic-related circumstances -- you may qualify for a plus-up payment.
For example, let's say you made over $150,000 in 2019 as an individual filer and had not filed your 2020 tax return in time for the third stimulus check. The IRS would not have issued a stimulus check to you because your income would have been higher than the limits for the third stimulus check.
But, let's say you lost your job at the start of the pandemic in 2020 and no longer make $150,000 as a single person filing taxes alone. You now make less than $60,000, which is what your 2020 tax return will reflect when you file it.
Well, in this case, that's less than the $75,000 cutoff for the third stimulus payment, so you would likely be eligible for a plus-up payment from the IRS.
The same goes for couples filing jointly who had a significant drop in income from 2019 to 2020. If you and your spouse made over the income limitations in 2019 but under in 2020, you may be eligible for a plus-up payment.
Did you have a baby during 2020? You may be in line for a plus-up payment.
The third stimulus bill included $1,400 payments for adults and dependents claimed on your tax returns, and a new baby is eligible for the full payment (if you qualify for the stimulus money, of course). Therefore, adding another dependent to the mix during 2020 could qualify you for another dependent stimulus payment for that tax year.
Unlike the first two stimulus bills, the third stimulus bill made it possible for eligible recipients to receive stimulus money for all eligible dependents in your care. This includes money for any type of dependent, whether it was college students, elderly relatives, or disabled relatives under your care.
So, if you claimed a new dependent in 2020 -- and you qualified for the stimulus money on your 2020 tax return -- you could be entitled to a plus-up payment.
If you think you're in line for a plus-up payment, you may be wondering how to claim the money that's owed to you. Well, the good news is that you don't have to do anything other than file your 2020 taxes to receive your plus-up payment -- if you're actually eligible, that is.
As it did with the stimulus payments, the IRS will be the one determining whether or not you receive a plus-up payment. There is no formal process for claiming these overages to the IRS; they'll use your 2020 tax information to determine whether you qualify for a plus-up payment.
Once you have filed your 2020 taxes and the IRS deems you eligible, they will initiate the plus-up payment on their end. There is no need for you to take any extra steps to claim the money.
That said, the IRS also noted on its website that some federal benefits recipients may need to file a 2020 tax return, even if you don't usually file your taxes. This will give the IRS the information it needs in order to send payments for any qualified dependent. So, if you're a member of this group, you should file a 2020 tax return as soon as possible to receive your plus-up dependent payment.
The short answer? Right now and in the near future. The IRS has already started sending out plus-up payments, and will continue to do so as it processes 2020 tax returns and determines who is eligible for them.
So, if your circumstances have changed dramatically from 2019 to 2020 and you want to get access to your plus-up payment sooner rather than later, you need to file your 2020 tax return as quickly as possible. That's the only way for the IRS to determine that you're eligible for this plus-up payment.
You can! As with the last three stimulus payments, you can use the IRS's Get My Payment tool to see the status of your stimulus money and your plus-up payments. If you are eligible, the tool will tell you how and when the money will be sent to you.
You can also use the USPS Informed Delivery system tool to keep an eye on any paper checks or debit cards headed your way. If you received a paper check for your stimulus payment, chances are good you will receive your plus-up payment through the mail, too -- so keep an eye out if you've filed your tax return for 2020 and it has been processed by the IRS. You may see some extra money coming your way.
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