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How to claim your missing stimulus payment when filing your taxes

How to claim your missing stimulus payment when filing your taxes
(Image credit: Getty)

If you’re still waiting on either of your stimulus checks, or believe you’ve received the wrong amount, the quickest way to get the money you are due is by filing your 2020 tax return. That’s the message from the Internal Revenue Service (IRS), which has just completed its dispatch of the second round of stimulus payments worth up to $600 per adult and up to $600 for each qualifying child under 17. 

The roll-out of the first stimulus payment - which paid up to $1,200 per adult, and $500 for children under 17 - has long since ended too, but anyone feeling short-changed by what they’ve received so far, or who have received nothing at all, is being encouraged to file their taxes as soon as the IRS opens its doors to returns on February 12

The money is being paid to help households navigate the financial storm created by the pandemic, and so if you need it to cover your mortgage, or it will prevent you from turning to payday loans or credit cards, you should claim it as quickly as you can.

Could my stimulus check still arrive?

The lessons learnt from the first delivery of stimulus checks means the operation has been a lot smoother second time around (and should run like clockwork if stimulus check 3 gets the go ahead). As a result, in the month since stimulus check 2 was first approved, the Treasury has reported issuing nearly 150 million payments. Some 114 million will have landed directly into Americans' online bank accounts, around 27.3 million have been sent in the form of a paper check, and a further 8.1 million payments are on debit cards, similar to how some payments were made the first time around

At the end of January the IRS said that all payments had been completed, except for two million that were to be reissued by check or direct deposit within the week to those who had experienced problems with their bank accounts. So while there’s a chance a few paper checks and debit cards might still be making their way through the mail system, the vast majority should have received whatever has been sent by now.  

How to claim your missing stimulus payment when filing your taxes

(Image credit: Getty)

Why haven't I received my stimulus check?  

The original stimulus payment was based on either your 2018 or 2019 tax return, while the second check has been paid according to your 2019 return. A dedicated Non-Filers tool designed to capture the details of people who wouldn’t normally file a tax return, but still qualified for the payment, was introduced by the IRS too, but closed in November.  

Others will have slipped through the net too, and either not received their payment or got less than what they were owed, due to the circumstances changing. In light of the pandemic, millions of Americans have either become unemployed or seen their income hit over the past year, meaning that some who didn't initially receive the first stimulus based on their 2018 or 2019 tax returns may now qualify. Some college students who were claimed as dependents on their parents' return in 2019, but file their taxes independently now, might also now qualify for a payment when they didn’t before. 

What should I do now? 

The good news if you’re eligible, but either don’t receive a check in the next few weeks, or receive less than you think you should, is that the money should still find its way to you. The process now, however, will require you to claim a Recovery Rebate Credit when you file your tax return for 2020.

To help you work out if you qualify, the 2020 tax return instructions include a worksheet you can use to figure the amount of any Recovery Rebate Credit for which you are eligible - you’ll need to know how much, if anything, you’ve received from stimulus checks to date.

How will the Recovery Rebate Credit be paid? 

If you are eligible for extra money, you can claim the rebate when you file your return, using Form 1040 or Form 1040-SR. While this can be completed electronically using tax software or on paper, the IRS advises that the “safest and fastest way” to get paid is to take the electronic path and opt for payment via Direct Deposit - nine out of ten taxpayers who do this are predicted to receive their refund within 21 days of filing.  

Any outstanding stimulus payments you are owed will be included with your tax refund, if you are due one. What this also means is that you might not get the full stimulus payment you are expecting if you owe back taxes - so a rebate credit for the entire $600 owed under stimulus check 2 will only result in a $200 payment if you owe the IRS $400 in taxes. 

How to claim your missing stimulus payment when filing your taxes

(Image credit: Getty)

Who is eligible for the rebate credit? 

The IRS says that generally you’ll be eligible for the rebate credit if you were a U.S. citizen or U.S. resident alien in 2020, cannot be claimed as a dependent of another taxpayer for tax year 2020, and have a Social Security number valid for employment that is issued before the due date of your 2020 tax return (including extensions).

The amount you receive under the rebate will be phased out if your adjusted gross income for 2020 exceeds $150,000 if you are married filing a joint return or filing as a qualifying widow or widower, $112,500 if you are using the head of household filing status, or $75,000 if you are using any other filing status.

What if I don’t usually file taxes? 

Even if you’re usually not required to file a tax return, you will need to file Form 1040 or Form 1040-SR this year in order to claim the Recovery Rebate Credit. If your income is less than $72,000, you can file your Federal return electronically for free using the IRS Free File program. The system is now up and running for people to get everything ready, even though the IRS will not begin processing returns until February 12.    

Tim is Finance Editor at Top Ten Reviews. With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors. A keen armchair follower of most sports, Tim regularly plays soccer, and also enjoys attending live music events, when not having to chase after his two children.