You might be receiving more money in the mail from the IRS, but it’s not a fourth stimulus check—it’s a “plus-up payment.” You’ll only receive this check if your third stimulus payment was calculated using income stated in your 2019 tax return, and if your income was less in 2020 than it was in 2019. Here’s how the plus-up payment works.
Since your third stimulus check was sent in the middle of the 2020 tax season, the IRS had to calculate your payment using income information that it had on hand, whether that was a 2019 or 2020 tax return. Therefore, if your third stimulus check was based on your 2019 return, and your income has decreased since then, then the IRS still owes you the difference.
Note that the amount of your payment will vary based on your income. If you made less than $75,000 in 2020 (or $150,000 for joint filers), then you will be entitled to $1,400. If you made more than these thresholds, however, then the amount will rapidly phases out to $0 if you earn $80,000 (or $160,000 for joint filers). Another way you’ll be owed more money is if you’ve added dependents to your household since 2019, as they also qualify for stimulus payments.
If you’re owed a plus-up, the IRS will calculate what you’re owed automatically based on your 2020 tax return, so you don’t have to do anything except make sure that the tax return is filed. However, if you requested an extension to file your taxes, note that your 2020 return must be filed and processed by Aug. 16 to receive a plus-up payment, per Kiplinger.
If you’re expecting a check but haven’t received it, it’s very possible that the IRS has not processed it yet, as they’re still dealing with a large backlog that still includes 2019 tax returns.
At this point, the only way you can get that money is by claiming a Recovery Rebate Credit in your 2020 tax return.
Source link: lifehacker.com