Never mind your tax refund. Stimulus check money is the real reason to file early this year
There’s always a good reason to file your taxes when the IRS starts processing returns (which is Feb. 12 this year), as opposed to waiting until the April 15 deadline. For example, you’ll get your federal tax refund sooner. However, this year gives you two more motives to start preparations ahead of time for tax season 2020. By setting up direct deposit with the IRS, you’ll most likely receive your third stimulus check sooner, especially a new stimulus payment arrives during tax season. By filing as early as you can, you’ll also be able to recover any unpaid stimulus check money you’ve been owed since the Jan. 15 IRS deadline.
At least 8 million people who should’ve been eligible for stimulus check money didn’t receive the check they were due — and millions more may not have gotten all the funds they were entitled to — because of a clerical error or some other issue. Some folks had problems with custody and child support, missing money for child dependents in general, or accidental garnishment.
Whatever your individual situation, we’ll explain how filing early can help you get your absent stimulus check money (along with a tax refund, if you qualify). Then we’ll show you how to estimate your total and what you need to do to get the stimulus check tax credit on your 2020 tax return. In addition, here’s everything to know about stimulus checks and your 2020 taxes, the top facts you should keep in mind and when it’s time to contact the IRS or set up a payment trace.
Important dates to remember: When you could get the missing stimulus money and your tax refund
Though you can still technically file your taxes by post and request a paper check, the fastest way to get the money you’re owed is to file electronically and have funds deposited directly into your bank account. This year, the IRS won’t begin accepting tax returns until Feb. 12, making that the soonest you can submit your own (April 15 is the last day to file). The IRS says 90% of filers will receive their refunds in 21 days or sooner, but it could also take even less time than that.
The IRS says its Where’s My Refund tool will reflect the status of your refund within 24 hours of filing, which could include a confirmation that your refund has been issued. From there, it could take anywhere from one to three days for the money to appear in your bank account.
Assuming seven days is the soonest you’d get your combined tax/stimulus refund and 21 days is the longest, we’ve sketched out what a difference filing sooner, rather than later, could make. (There’s more directly below on how to calculate how much money you might get in addition to your tax refund.)
How do you know if the IRS owes you a stimulus payment?
To figure out whether and how much money you’re owed from a previous round of stimulus checks, if any, first you have to determine how much you were owed for each previous payment, then subtract from that the amount you actually received (if any).
Here’s how to calculate the payments you were owed:
- For the first check, use this $1,200 stimulus calculator to estimate your total.
- For the second check, use this $600 stimulus calculator for an estimate.
- For the possible third check, use this $1,400 calculator.
Next, you’ll want to check your bank account where your payments were deposited to determine the amount. (If you received an EIP card, you can check the balance and transaction history here.) The IRS should’ve sent you a letter within 15 days of issuing your stimulus check, however it was issued, and that letter should indicate how much money you received. (Here’s what to do if you didn’t get the IRS’ notice.)
If you no longer have that letter, you can use the IRS’s Get My Payment tool to help you figure out when you received the payment. It’ll also show you the last four digits of the bank account it was deposited into if it was deposited directly.
There’s also a form to help you figure out the amount you’re owed on page 59 of this PDF detailing instructions for 1040 and 1040-SR tax forms, but it’s a doozy to follow.
Why the IRS could owe you money from one or both stimulus checks
There are all kinds of reasons why the IRS might still owe you stimulus check money, including:
- You missed the deadline to request a payment.
- Money was mistakenly garnished from a previous stimulus check.
- There was an error with your direct deposit.
- You claim a child as a dependent for whom you didn’t get paid.
- The IRS made a mistake calculating a previous check.
How to claim your missing stimulus credit on your taxes
The IRS requires you to fill out either form 1040 or 1040-SR if you’re going to claim a Recovery Rebate Credit on your 2020 taxes. Once you have the amount you’re owed worked out, you’ll enter it on line 30 of either of those forms (see screenshot). Yes, it’s that simple.
How your missing stimulus check money will be sent to you
If you’re due a refund from the IRS, it’ll include both your full refund amount plus whatever you’re owed from the Recovery Rebate Credit. In other words, it’ll be bigger. If, however, you owe the IRS money, your Recovery Rebate Credit will be applied to the debt. If the tax credit is more than you owe, you’ll receive the difference as a refund.
Here’s what to do if you’re a nonfiler, i.e. you won’t be filing taxes for 2020, and you’re still owed a stimulus check. If you have child dependents, this information about the child tax credit could help put more money in your pocket. And here’s how to calculate your Adjusted Gross Income, aka “AGI.”
This article was originally published on Never mind your tax refund. Stimulus check money is the real reason to file early this year