President Joe Biden’s “American Rescue Plan,” his signature COVID-19 relief plan, has been paying out a third round of $1400 stimulus checks since early in March. Significantly, on April 28th, an additional two million payments, collectively worth around $4.3 billion, were sent out by the IRS. These payments mostly targeted people who were left off of the original third wave of checks, mostly due to gaps in the IRS’ information.
Why? One of the most significant ways that these people missed their original stimulus payments was through not filing their tax returns for the past year, which provided the IRS with the identity of a living taxpayer – and hence the identity of someone who was eligible to receive a stimulus check. Therefore, even if you would not normally file a tax return for the previous year because you would not get any money from it, the IRS is encouraging you to do so in 2020.
Another key reason to file a 2020 tax return is that, even if the IRS has your return from 2019, it is possible that the updated information is worth more in stimulus. The current wave of payments includes 730,000 “plus-up” payments – payments that are, in other words, supplementary to payments that were already made. There are a number of other payments that many people might be eligible for, including the 2020 Recovery Rebate Credit, the Child Tax Credit, and the Earned Income Tax Credit.
Most significantly of these, the 2021 Child Tax Credit – which was increased through legislation to $3000 per year per child or more – will be paid in advance through the summer of 2021 to eligible parents. This means, in effect, that some parents could receive what amounts to a fourth stimulus payment over the summer. A tool called “Get My Payment” on the IRS website can assist with this.
Altogether, it’s a good idea to send in a tax return, even if you don’t expect to get any money back. This is particularly true during COVID relief, when the government has gone out of its way to ensure that people receive the proper relief they qualify for – as the most recent wave of payments shows.
Moreover, tax preparation has in recent years become easier than ever, with the IRS even advertising a free tool to help. There is no good reason not to do it, and the possible financial benefits make it well worth the time.
Trevor Filseth is a news reporter and writer for the National Interest.
Another Stimulus Check? The Simple Thing You Can Do To Get Paid. is written by for nationalinterest.org