Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

IRS Updates Its Guidance on Third-Round Economic Impact Payments

By:
Ruth Singleton
Published Date:
Mar 28, 2022

GettyImages-174879501 IRS Internal Revenue Service

The IRS has issued a revised fact sheet on the third round of Economic Impact Payments, the pandemic-related payments of $1,400 made to eligible individuals, authorized by the American Rescue Plan Act of 2021. 

According to Accounting Today, the areas where the IRS amended its FAQs include general information, eligibility and calculation of the third payment, plus-up payments, and Economic Impact Payment cards. Also revised is information about requesting and receiving the payments, instructions for reconciling them on the tax return and specific information for Social Security, Railroad Retirement and Veterans Affairs benefit recipients. In addition, the revised fact sheet explains what happens when a payment has been lost, stolen, destroyed or hasn’t been received. 

In the fact sheet, the IRS noted that “the third-round Economic Impact Payment was authorized by the American Rescue Plan Act of 2021 as an advance payment of the 2021 Recovery Rebate Credit. The IRS started sending the third-round Economic Impact Payments to eligible individuals in March 2021 and continued sending payments throughout the year as tax returns were processed. The IRS has issued all third-round Economic Impact Payments (including all plus-up payments).”  

The agency reported that families and individuals in some circumstances may not have received the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020, and that they may be eligible to receive more money by claiming the 2021 Recovery Rebate Credit on their 2021 income tax return. 

Those families and individuals include parents of a child born in 2021 who claim the child as a dependent on their 2021 income tax return; families who added a dependent other than a newborn child on their 2021 income tax return who was not listed as a dependent on their 2020 income tax return; single filers who had incomes above $80,000 in 2020 but less than that in 2021; married couples who filed a joint return and had incomes above $160,000 in 2020 but less than that in 2021; head-of-household filers who had incomes above $120,000 in 2020 but less than that in 2021; single filers who had incomes between $75,000 and $80,000 in 2020 but lower incomes in 2021; married couples who filed a joint return and had incomes between $150,000 and $160,000 in 2020 but lower incomes in 2021; and head-o- household filers who had incomes between $112,500 and $120,000 in 2020 but lower incomes in 2021. 

The IRS stressed that individuals must claim the 2021 Recovery Rebate Credit on their 2021 income tax return in order to get this money; the IRS will not automatically calculate the 2021 Recovery Rebate Credit.  

It noted that the Get My Payment application is no longer available. In order to find information regarding economic impact payments, taxpayers need to securely access their individual IRS online account and look under “Tax Records.”

The IRS also clarified that Economic Impact Payments can’t be counted as income when determining if a taxpayer or anyone else is eligible for benefits or assistance, or how much a taxpayer  or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs also can’t count Economic Impact Payments as a resource for purposes of determining eligibility for a period of 12 months from receipt. 

In addition, the IRS urged taxpayers “to be on the lookout for scam artists trying to use the Economic Impact Payments as a cover for schemes to steal personal information and money,” noting that “the IRS doesn't initiate contact by email, text messages, or social media channels to request personal or financial information – even information related to the Economic Impact Payments. Also, watch out for emails with attachments or links claiming to have special information about Economic Impact Payments or refunds.” 

The guidance urged taxpayers whose Economic Impact payments were lost, stolen or destroyed, or who did not receive them, to request a payment trace. If a trace is initiated, and the IRS determines that a taxpayer’s check wasn’t cashed, the IRS will credit the person’s account for that payment, but the IRS cannot reissue a payment. Instead, the taxpayer will need to claim the 2021 Recovery Rebate Credit on their 2021 tax returns if eligible. 

 



 

The IRS has issued a revised fact sheet on the third round of Economic Impact Payments, the payments of $1,400 made to eligible individuals, authorized by the American Rescue Plan Act of 2021. 

 

According to Accounting Today, the areas where the IRS amended its FAQs include general information, eligibility and calculation of the third payment, plus-up payments and Economic Impact Payment cards. Also revised is information about requesting and receiving the payments, reconciling them on the tax return and specific information for Social Security, Railroad Retirement and Veterans Affairs benefit recipients. In addition, the revised fact sheet explains what happens when a payment has been lost, stolen, destroyed or hasn’t been received. 

In the fact sheet, the IRS noted that “the third-round Economic Impact Payment was authorized by the American Rescue Plan Act of 2021 as an advance payment of the 2021 Recovery Rebate Credit. The IRS started sending the third-round Economic Impact Payments to eligible individuals in March 2021 and continued sending payments throughout the year as tax returns were processed. The IRS has issued all third-round Economic Impact Payments (including all plus-up payments).”  

 

The agency reported that families and individuals in some circumstances may not have received the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020, and that they may be eligible to receive more money by claiming the 2021 Recovery Rebate Credit on their 2021 income tax return. 

 

They include parents of a child born in 2021 who claim the child as a dependent on their 2021 income tax return; families who added a dependent other than a newborn child on their 2021 income tax return who was not listed as a dependent on their 2020 income tax return; single filers who had incomes above $80,000 in 2020 but less than that in 2021; married couples who filed a joint return and had incomes above $160,000 in 2020 but less than that in 2021; head of household filers who had incomes above $120,000 in 2020 but less than that in 2021; single filers who had incomes between $75,000 and $80,000 in 2020 but lower incomes in 2021; married couples who filed a joint return and had incomes between $150,000 and $160,000 in 2020 but lower incomes in 2021; and head of household filers who had incomes between $112,500 and $120,000 in 2020 but lower incomes in 2021. 

The IRS stressed that individuals must claim the 2021 Recovery Rebate Credit on their 2021 income tax return in order to get this money; the IRS will not automatically calculate the 2021 Recovery Rebate Credit.  

It noted that the Get My Payment application is no longer available. In order to find information regarding economic impact payments, taxpayers need to securely access their individual IRS online account and look under “Tax Records.”  

The IRS also clarified that Economic Impact Payments can’t be counted as income when determining if a taxpayer or anyone else is eligible for benefits or assistance, or how much a taxpayer  or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs also can’t count Economic Impact Payments as a resource for purposes of determining eligibility for a period of 12 months from receipt. 

 

In addition, the IRS urged taxpayers “to be on the lookout for scam artists trying to use the Economic Impact Payments as a cover for schemes to steal personal information and money,” noting that “the IRS doesn't initiate contact by email, text messages, or social media channels to request personal or financial information – even information related to the Economic Impact Payments. Also, watch out for emails with attachments or links claiming to have special information about Economic Impact Payments or refunds.” 

 

The guidance urged taxpayers whose Economic Impact payments were lost, stolen or destroyed, or who did not receive them, to request a payment trace. If a trace is initiated, and the IRS determines that a taxpayer’s check wasn’t cashed, the IRS will credit the person’s account for that payment, but the IRS cannot reissue a payment. Instead, the taxpayer will need to claim the 2021 Recovery Rebate Credit on their 2021 tax returns if eligible. 

 

The IRS has issued a revised fact sheet on the third round of Economic Impact Payments, the payments of $1,400 made to eligible individuals, authorized by the American Rescue Plan Act of 2021. 

 

According to Accounting Today, the areas where the IRS amended its FAQs include general information, eligibility and calculation of the third payment, plus-up payments and Economic Impact Payment cards. Also revised is information about requesting and receiving the payments, reconciling them on the tax return and specific information for Social Security, Railroad Retirement and Veterans Affairs benefit recipients. In addition, the revised fact sheet explains what happens when a payment has been lost, stolen, destroyed or hasn’t been received. 

In the fact sheet, the IRS noted that “the third-round Economic Impact Payment was authorized by the American Rescue Plan Act of 2021 as an advance payment of the 2021 Recovery Rebate Credit. The IRS started sending the third-round Economic Impact Payments to eligible individuals in March 2021 and continued sending payments throughout the year as tax returns were processed. The IRS has issued all third-round Economic Impact Payments (including all plus-up payments).”  

 

The agency reported that families and individuals in some circumstances may not have received the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020, and that they may be eligible to receive more money by claiming the 2021 Recovery Rebate Credit on their 2021 income tax return. 

 

They include parents of a child born in 2021 who claim the child as a dependent on their 2021 income tax return; families who added a dependent other than a newborn child on their 2021 income tax return who was not listed as a dependent on their 2020 income tax return; single filers who had incomes above $80,000 in 2020 but less than that in 2021; married couples who filed a joint return and had incomes above $160,000 in 2020 but less than that in 2021; head of household filers who had incomes above $120,000 in 2020 but less than that in 2021; single filers who had incomes between $75,000 and $80,000 in 2020 but lower incomes in 2021; married couples who filed a joint return and had incomes between $150,000 and $160,000 in 2020 but lower incomes in 2021; and head of household filers who had incomes between $112,500 and $120,000 in 2020 but lower incomes in 2021. 

The IRS stressed that individuals must claim the 2021 Recovery Rebate Credit on their 2021 income tax return in order to get this money; the IRS will not automatically calculate the 2021 Recovery Rebate Credit.  

It noted that the Get My Payment application is no longer available. In order to find information regarding economic impact payments, taxpayers need to securely access their individual IRS online account and look under “Tax Records.”  

The IRS also clarified that Economic Impact Payments can’t be counted as income when determining if a taxpayer or anyone else is eligible for benefits or assistance, or how much a taxpayer  or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs also can’t count Economic Impact Payments as a resource for purposes of determining eligibility for a period of 12 months from receipt. 

 

In addition, the IRS urged taxpayers “to be on the lookout for scam artists trying to use the Economic Impact Payments as a cover for schemes to steal personal information and money,” noting that “the IRS doesn't initiate contact by email, text messages, or social media channels to request personal or financial information – even information related to the Economic Impact Payments. Also, watch out for emails with attachments or links claiming to have special information about Economic Impact Payments or refunds.” 

 

The guidance urged taxpayers whose Economic Impact payments were lost, stolen or destroyed, or who did not receive them, to request a payment trace. If a trace is initiated, and the IRS determines that a taxpayer’s check wasn’t cashed, the IRS will credit the person’s account for that payment, but the IRS cannot reissue a payment. Instead, the taxpayer will need to claim the 2021 Recovery Rebate Credit on their 2021 tax returns if eligible. 

Click here to see more of the latest news from the NYSSCPA.