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Third Stimulus Check Payment

If you did not receive your third stimulus check, this is to be claimed on your 2021 tax return as the Recovery Rebate Credit or RRC. This refundable tax credit was introduced in 2020 and was composed of stimulus one and two. All these were advance payments of the credit; claim your 2021 Recovery Rebate Credit when you prepare your 2021 return on eFile.com.

Stimulus
Three

This payment includes a $1,400 stimulus check to qualifying individuals and their dependents as part of the American Rescue Plan Act, or President Biden's tax plan. Additionally, there are changes to the 2021 Child Tax Credit, the 2021 Earned Income Tax Credit, 2021 Child and Dependent Care Credit, and past (2020) unemployment benefits. See information about Stimulus Payment One and Stimulus Payment Two. If you did not received the Stimulus 1 or 2 payments, claim the Recovery Rebate Credit on your 2020 Tax Return by filing a tax amendment (note: first, verify that it was not already claimed on Line 30 on Form 1040). If you did not file a 2020 return, see how to prepare a previous year return. The IRS Get My Payment tool is being used to show the status of the third stimulus payment, not the first or second.

Note: The IRS Get My Payment tool may now show the status of your "plus-up" payment - details on this below. If you are owed additional stimulus credit after filing your 2020 return, this will now be reflected on the IRS tool. This means that your initial third payment will no longer be shown; instead, you will only see the status and amount of your plus-up payment.

 

Start 3. Stimulus Calculator

Stimulus Payment Three Requirements

The third stimulus payment requires the eligible recipient to be a U.S. citizen or resident alien, posses a Social Security number, and not be claimed as a dependent. For married couples where only one spouse has a valid SSN, you can expect the third payment as it follows the same ruling as the second Economic Impact Payment where the spouse with the valid SSN receives the payment. Taxpayers without an SSN will not be eligible, but, if they have dependents with valid SSNs, they will receive payment for their qualifying dependents. For married filing joint taxpayers where one is active duty military, only one spouse needs to have a SSN, and they will both receive the payment.

The payment phases out for singles with adjusted gross incomes (AGI) between $75,000 and $80,000. For married filing joint taxpayers, the phase out threshold falls between $150,000 and $160,000. Head of household filers will see a phaseout between $112,500 and $120,000. The phase out decreases the payment by 5%, or $5 for every $100 over the lower point of the range. This goes until it reaches the high point where it is brought down to $0 and the taxpayer is ineligible. See information about your tax return filing status here.

The third stimulus payment amounts are as follows:

  • $1,400 for single filers, head of household, married filing separate, and widower.
  • $2,800 for couples claiming married filing jointly if both spouses claimed unemployment compensation.
  • $1,400 per eligible, claimed dependent. Dependents, children (e.g. college students or disabled adults) over the age of 17 are eligible for an additional $1,400 for this round of stimulus payments. Find out if someone qualifies as a dependent here.
  • Social Security, railroad retirement recipients, veterans, supplemental security (SSI), or disability income recipients should receive payment based on Form SSA-1099 or Form RRB-1099 just as they did for Stimulus 1 and 2. If you do not receive the full amount for your dependents, you would have to file a 2021 return to include your dependents.
  • If you did not file a 2019 return and had no income in 2020, thus would not file a 2020 return, you will need to prepare and e-file a 2021 tax return.

Similar to the second stimulus payment, the third payment is going to be an advance payment, thus it will not be subject to past due state or federal debts nor administrative offsets.

Third Stimulus Scenarios

My ex-spouse and I alternate years claiming our dependent; who should get the additional third stimulus payment?

The third stimulus payment is an advance payment of the Recovery Rebate Credit on the 2021 tax return. The first two stimulus payments were part of the 2020 return, thus were claimed on Form 1040 when filing a 2020 tax return. This means that, if you and your ex-spouse alternate years, then the rightful recipient of the third stimulus payment is the spouse who is going to claim the dependent on the 2021 tax return. This can lead to some complications with the IRS who likely issued the payment based on 2020. It is best if taxpayers can communicate on this matter; when filing for 2021, the taxpayer who may have wrongly received the credit (as per the agreement) may owe it on their 2021 return.

Someone received my additional stimulus for claiming my dependent(s) on the 2020 tax return.

If for any reason someone claimed your dependent in 2020 and received the additional stimulus payment and they were in fact not eligible to, they will likely be made to pay it back in 2022 when they file their 2021 return. If you know who claimed your dependent, it is best for both parties to communicate the matter. The person who wrongly claimed may have to file a tax amendment. Ideally, you would not want to have the incorrect recipient hand over the funds as this may complicate things when filing in 2022. Instead, consider the amendment or simply file your 2021 returns and report your stimulus information. The IRS should then issue the stimulus funds to the person rightfully claiming the dependent and the person who wrongly received it would owe to the IRS.

This matter may also have implications of the advance Child Tax Credit.

I did not receive the third stimulus payment for any reason.

Many taxpayers did not receive the third stimulus or the full amount. If you did not receive this, be sure to have prepared and filed a 2020 tax return as the IRS used this to issue the payment. Otherwise, you can wait until 2022 to prepare and file a 2021 tax return and claim the 2021 Recovery Rebate Credit similarly to how the 2020 RRC was claimed by filing a 2020 return.

Detailed Stimulus Three Overview - PDF File

The information in this document was released February 14, 2021.
The information on this page is updated with the current bill.

Check the status of your third stimulus check via the IRS Get My Payment tool:

Get your IRS Stimulus Payment Status

On April 1, 2021, the IRS put out the following information:

  • Taxpayers who were issued a third stimulus payment based on their 2019 return may be eligible for a supplemental payment or "plus-up" payment from the IRS once they submit their 2020 return if their information changed. Note: if you e-filed an IRS tax extension, you will want to get your 2020 return filed to receive any form of additional payment you may be entitled to. If you only have an extension, this is not enough information for the IRS to issue this payment. 
  • If your tax situation changed from 2019 to 2020 and you are owed more than the third stimulus payment you received, the IRS should issue you an additional plus up payment once your 2020 return has been filed.
  • For example, if you had a child in 2020, added a dependent to your 2020 return, and you received the third stimulus payment before filing your 2020 return, the IRS will issue you the additional credit for your dependent once they have received your updated return. 

April 15, 2021, the IRS stated the following: WILL THIS BE 2021 AS WELL?

  • The IRS is making efforts to help those experiencing homelessness and/or those without a permanent address. As such, they will be allowing those to file a 2020 return using an alternative address (the address of a friend, relative, or shelter, for example). Filing a 2020 return does not claim the third stimulus payment, but gives the IRS information to issue you the EIP.
  • Taxpayers experiencing homelessness may also be eligible for the Earned Income Tax Credit or EITC if they meet additional criteria.

What you Can Do in 2022

Prepare and eFile a 2021 Tax Return so to claim the credit and give the IRS your latest bank information and address. Below, find examples of certain scenarios for those in specific situations.

What if I don't have any income for the third stimulus payment? If you do not have taxable income, do not normally file a tax return, or receive only nontaxable Social Security benefits or Supplemental Security Income, the IRS should have issued your payment through record with the respective agencies. Ideally, you should have seen your payment come through direct deposit if you had that information on record or through the mail as a check or prepaid debit card. If you did not receive the payment or you do not receive the full funds for your dependents, file a 2021 tax return to claim your payment.

How do I claim the third stimulus check as a non filer? If you used the non-filer tool to file a 2019 return in 2020 to receive the first stimulus check or a 2020 non-filer return to claim both, then you do not have to file an additional non-filer return. The IRS will use the information from your original non-filer return to issue a third stimulus check based on the information from that return. If you are a non filer and did not file a return for the previous stimulus checks or simply did not get your full amount, you can file a 2021 return to claim the stimulus three.

Dependents in 2021: If you added an additional dependent, file your 2021 return so the IRS could include this as part of the third stimulus payment calculation.

Important Tax Changes from the Stimulus Three Bill

Child Tax Credit: The bill adjusts how the Child Tax Credit will work in 2021 as well as increases the amounts - this may be referred to as the Advanced Child Tax Credit. The credit will allow 17 year-old dependents to qualify and provide up to $3,000 per qualifying child or $3,600 per qualifying child under age 6. The credit will also be fully refundable - it has always been a partially refundable credit - and is being made more accessible for those without taxable income by removing the $2,500 earnings floor.

Similarly to the stimulus payments and the Recovery Rebate Credit, you will be able to claim a portion of the Child Tax Credit as an advance payment. Throughout the year, you may be eligible to receive payments on a scheduled basis in 2021 and claim the remainder of the credit on your 2021 tax return in 2022. The advance Child Tax Credit payments are set to be paid to qualifying taxpayers on the 15th of each month of 2021 beginning July 15. 

Child and Dependent Care Credit: In addition to the CTC, if you make qualified payments to a childcare provider so you can work or look for work, you may be able to claim the Child and Dependent Care Credit (CDCC). For 2021, this credit has been greatly enhanced, offering more than double the original credit amount as a fully refundable tax credit. Taxpayers with two or more dependents may be eligible to claim up to $8,000 on their 2021 tax return filed in 2022. Additionally, if you contribute to a Flexible Spending Account (FSA), you can contribute up to $10,500 to this account through 2021. 

Earned Income Tax Credit: The American Rescue Plan will allow qualifying taxpayers at age 19 and older to qualify - previously 25 - and eliminates the maximum age of 64. Additionally, those without qualifying children will see increases to the amount they receive as the act increases the percentage amount and the phaseout limits. The maximum EITC credit will be raised from $540 to around $1,500 for those without dependents. Additionally, disqualifying investment income limits will be raised from $2,200 to $10,000.

Health Care, Job Loss, COBRA: The Consolidated Omnibus Budget Reconciliation Act program allows those who lost their job to stay enrolled in their employer healthcare plan. This can typically be costly as the taxpayer would be responsible for the full amount of healthcare coverage. Under ARPA, if you are affected by job loss due to COVID-19 and enroll in COBRA, the government will pay 100% of your CORBA premium from April 1, 2021, to September 30, 2021. This applies for laid off employees as well as their family members. Additionally, for those who purchase health insurance through the marketplace, you may be able to receive a higher premium tax credit as part of the act.

Tax Changes for 2020 Unemployment Benefits

Attention:

  • If you eFiled your 2020 return on or before March 15, 2021 and reported unemployment income, and you want to adjust your income taxes based on the American Rescue plan of March 12, 2021, you do not have to do anything. The IRS has confirmed that they will issue refunds for those who filed before the bill was passed and implemented into tax preparation systems. States are electing to conform or decouple from the unemployment changes - see how your state is handling this situation.
    • The IRS has begun issuing these refunds as of May 10, 2021. There is no tracking nor lookup tool, but taxpayers may be able to see a scheduled transaction in their IRS account - see how to create an IRS account. Here, navigate to the View Tax Records on the homepage and click the Get Transcript button. In the dropdown menu, select Federal Tax, click Go, and you will land on a page displaying your IRS history - transactions, income tax returns, etc. Here, select 2020 Account Transcript and view the PDF that opens which displays all transactions from 2020 - 2021. You may see an entry titled Refund issued under the Transactions section - if this date is some time in late May or early June and it not your 2020 tax refund, this may be your UCE refund.
  • If you eFile on or after March 16, 2021 and reported unemployment income, the eFile tax app will calculate all necessary adjustments; you do not have to do anything else. More details below.
  • The only reason to file a tax amendment with this change, as confirmed by the IRS, is that if doing so qualifies you for a tax credit, such as the Earned Income Tax Credit. For example, if you filed a return and did not receive the credit before the exclusion was applied, but now you are eligible based on the exclusion, you would be able to file an amendment and claim this credit. If you already claimed the credit, but are now eligible for a larger amount, the IRS will issue this as well. Note: the IRS stated on June 4, 2021, that they can adjust this for single taxpayers with no dependents who are newly eligible for the EITC.

Unemployment benefits are considered taxable income and thus must be reported on a tax return. A recipient of unemployment compensation will receive a Form 1099-G reporting the amount they received as well as the amount withheld. Many taxpayers filed a tax return reporting unemployment benefits for the first time in 2020.

The new bill, however, makes the first $10,200 of unemployment benefits nontaxable if the adjusted gross income of the taxpayer is less than $150,000. Since many taxpayers have filed a return reporting this income already, there will be adjustments due. If you have not filed a tax return yet to report unemployment income, you can do so on eFile.com as we have updated our platform to include the unemployment exclusion on your 2020 tax return. 

What this means for taxpayers is that they may be due a refund if they have already filed or their tax liability will be decreased when they get around to filing a 2020 return.

For example, if you received $9,000 of unemployment compensation during 2020, your entire amount is nontaxable under the bill. If you received $20,000 of unemployment income, then $10,200 of that income is tax free and the remaining $9,800 will be taxed. Report your unemployment income on eFile.com once we have updated information and the eFile application will determine the nontaxable portion of your unemployment compensation for you.

Did you receive an IRS Notice CP12 as a result of Recovery Rebate Credit amounts or stimulus payments? Follow the instructions on the CP12 as outlined on this page.

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