Stimulus Payments Are Coming

Direct deposit payments begin arriving Tuesday night

On Tuesday, the IRS said, "The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week." The IRS said eligible individuals do not need to take any action to receive this second payment, and the IRS will use the direct deposit information it has on file to make the payment.

The IRS cautioned that some "may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021."

Stimulus checks in the mail starting Wednesday

The IRS said for those without current direct deposit information on file with the government, the IRS will send the payment as a check or EIP debit card in the mail. Those payments will begin to be mailed starting Wednesday, Dec. 30, the IRS said. 

 How to check the status of your stimulus payment

The IRS said it is updating its Get My Payment tool for the second round of payments and anticipates those receiving checks will be able to check the status of both the first and second payments in a few days. The Get My Payment portal is available in English and Spanish.

 What about prepaid debit cards?

The IRS said that to speed delivery of the payments, it will send a limited number of payments out by Economic Impact Payment prepaid debit card and notes that some people who received a paper check last time might receive a debit card this time, and some people who received a debit card last time may receive a paper check.

The IRS cautions that those who are eligible but don't receive a direct deposit should watch their mail for a check or EIP debit card. The cards will arrive in a white envelope that displays the US Department of the Treasury seal, the IRS said.

 Why is Jan. 15, 2021, an important date to know?

Jan. 15 is the cutoff date in the $900 billion stimulus bill by which time the IRS and US Treasury must stop sending checks as part of this round of delivery. If you don't receive your full second stimulus check money by Jan. 15, you will need to claim all or part of the missing amount when you file your federal tax returns in 2021 through the Recovery Rebate Credit. You'll also be able to claim any money the IRS still owes you from the first round of payments.

People who receive their stimulus payment through direct deposit are unlikely to be affected. But there is potentially a distinct disadvantage for people who don't have direct deposit set up with the IRS.

Tying the delivery of a second stimulus check to the 2020 tax return will almost certainly delay delivery for many people, since a wide variance in circumstances will cause some people to file taxes as early as January and others as late as April 15, or even later if they need to request an extension. It also isn't clear how quickly the IRS would process the payments.

 How long could it take to get your second stimulus check through the mail?

Since the new stimulus bill sets a Jan. 15 deadline for the IRS to send out payments, people who will receive their second stimulus check in the mail -- either as a paper check or a prepaid debit card -- should look for a payment in the first three weeks of January, Mnuchin said on Dec. 21. According to the Treasury, 22% of the payments as of last summer were made by paper checks and another 3% by prepaid debit cards. 

However, after Jan. 15, you will have to claim any money the IRS owes you with your tax filing in 2021. That could further delay your stimulus check, since the timing would hinge on:

• When you file your 2020 taxes -- the deadline could be April 15, unless you file for an extension.
• How long it takes the IRS to process your tax return, which may also include your second stimulus check.
• If there are any complications that arise in your specific scenario that could further delay your check.

 Your first and second stimulus check won't be taxed by the government

The IRS doesn't consider stimulus payments to be income, which means you won't be taxed on your stimulus money, and the IRS won't garnish it to pay for any back taxes you owe. 

That also means a direct payment you get this year won't reduce your tax refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won't have to repay part of your stimulus check if you qualify for a lower amount in 2021. If you didn't receive everything you were owed this year, you can claim your full stimulus check amount as a Recovery Rebate Credit on your 2020 federal income tax return by filing in 2021 (more on that below). 

 You don't have to file taxes to get a stimulus check 

Though taxes do play a role in determining stimulus check eligibility, you don't need to have filed a tax return to qualify for a check. If you're over age 65, for example, and receive Supplemental Security Income or Social Security Disability Insurance, you could still qualify for a stimulus check under the CARES Act, and very likely still would if a second check is approved. You just might need to take an extra step to request your payment and get your check, but that could potentially change in a second round, once all the qualifications are known.

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