The IRS has been sending out regular weekly stimulus checks and payments have crossed the 165 million mark last week. The amount given out stands at close to $388 billion under the Economic Impact Payments sent directly to individuals and families. But that is cold comfort if you have missed out on the check.
The American Rescue Plan was signed by President Biden in March and will give out $1.9 trillion under various relief measures including the $1,400 third stimulus checks. The amount has brought reprieve for millions of Americans affected by the economic downturn triggered by the pandemic.
The amount has been mostly used for basic and immediate needs, to pay debts and mortgage. A small part of the amount has been invested by others.
As the money runs out for most people, there is speculation of a fourth stimulus payment. But you need to look out for your third if you are still waiting for it.
If you have missed out on any part of the full amount of the first and second stimulus check, here is what you should know.
A One-Of-A-Kind Task
The third stimulus check has been a bigger challenge because of both the additional challenges and the fact that we are bang in the middle of the final tax season. This has forced the IRS to indulge in multitasking on a massive scale.
The IRS has decided to keep sending stimulus checks to people despite having inadequate information about them. This has helped them avoid towering backlogs.
Many Americans received their payment based on the 2019 tax returns. This has made them receive less than if they were to be paid based on the 2020 returns. The IRS has resorted to plus-up checks to make up for any shortage in payment based on the 2019 tax returns. And they are sending the stimulus check in batches through the US postal service. Sending stimulus payments through direct deposits into bank accounts slowed down considerably after March 24, 2021.
It takes at least 4 weeks for mail to be delivered. Close to $1.8B was paid out May 12 alone. This batch included 460,000 checks sent through the US postal service.
Waiting Patiently For The Snail Mail
You are hopefully among the lucky ones who have their bank account details entered in the IRS records. Else, you will have to wait patiently for your paper check or the prepaid debit cards to come in through the postal service, which could take around a month.
To confirm your mode of payment, log into the Get My Payment tracker to confirm your payment and also to know how and when it was dispatched.
You will receive a letter from the authorities confirming the payment and the amount sent, something that is missing in the tracker. This letter will stand you in good stead if your payment is coming in through a debit card or paper check. Do not throw it away. Apart from being an official document confirming your payment, it will also be required while filing your 2021 tax returns.
An address change could cause your stimulus payment to be misdirected, especially if you have not updated your old address. So you might have your stimulus check reach your old address and be returned. That will delay your stimulus check even further.
The same goes for a change in bank address. If it bounces off once, the IRS will reissue your stimulus check through the US postal service.
Getting Snatched By A Private Debt Collector
The third stimulus check could be garnished by private debt collectors. This was not possible in the stimulus payments done in the previous year.
The check can be garnished to pay off several debts, though it isn’t allowed for the tax debt or child support payments.
A Delay At Your Bank
To speed up the process, the IRS has been sending out future-dated stimulus checks. The bank held up the checks as they could not pay before the effective date. This infuriated some people but the bank was just following the rules.
You Could Be A Non-Filer
Everyone doesn’t have to file returns. People earning below $12,400, having no other source of income, being single and below 65 do not need to file tax returns this year.
But then the IRS will not have your details to send you a check unless you are a veteran, a retired railroad employee, or under a Social Security scheme.
You Do Not Qualify For A Check For Various Reasons
For the third stimulus check the Congress has tried to limit the payments to the more deserving. People earning over a certain amount are denied a stimulus check. For instance, individuals earning above $80,000 and married couples filing jointly and earning more than $160,000 will be denied the third stimulus check.
The corresponding figures for the previous round of stimulus payments were $100,000 and $200,000.
The eligibility is calculated on the Adjusted Gross Income, the gross income less the standard deductions allowed.
Steps You Can Take To Recover Your Stimulus Check
If you find that your stimulus payment could be deferred, or even worse you are not in line for a stimulus check, there are measures you can take on your own to ease your immediate financial burden.
A Cut Down On Your Insurance Bills
Insurance payments take up a large part of your earnings. But the insurance companies are giving huge discounts in every insurance sector. For instance, car insurance majors have been offering discounts for drivers who are using their car infrequently. So if you look around a bit, you can restructure your insurance to get a good bargain.
You can also save hundreds on home insurance as rates have been slashed lately. Refinance your home loans and you can save a lot more.
The pandemic has led to hefty credit cards and other high-interest debts. You can save huge sums of money by restructuring your existing debts.
Home mortgage rates are also at an all-time low. Refinance your present mortgage. It could be your biggest savings yet. Around 13M homeowners have good credits and are in line for easy refinancing rates. They could save hundreds on their monthly expenses by just refinancing their present mortgage.
By being creative, you can save much more than the $1,400 you might be missing out on. Americans spend a large part of their income on eating out while at work. Cutting back on the online route for your meals and depending more on home-cooked meals could save you quite a few dollars.
The pandemic has been an eye-opener for most Americans. The acute financial disruption has forced many to evaluate the importance of having cash in hand to cope with a sudden loss in income.
