Plus Up Payment: Stimulus Check Eligibility Latest Update
– Plus up Payment –
All you need to know about plus up payment. If you’ve lately received a deposit from the IRS in your bank account, you might believe the federal government has made a fourth stimulus payment. That isn’t the case at all. It’s a “plus-up” payout, basically. Naturally, if you’ve never heard of a plus-up payment and haven’t gotten one, you’re probably seeing cash signs and getting excited.
What is a Plus-Up Payment?
To begin, let me state unequivocally that this is not a fourth stimulus check. A plus-up stimulus check is a money you owe from the previous stimulus check.
The stimulus payments have always been a paid-in-advance tax credit. To put it another way, the credit is based on the tax year in which it was granted.
The first two stimulus payments were for the tax year 2020, while the third stimulus check was for the tax year 2021.
Logan Murray, the owner of Pocket Project, a financial management planning firm in Tempe, Arizona, is a certified financial planner and tax preparer.
Murray says that the IRS had to base the original payment on something substantial in order to make the advance payment, and the prior year’s tax return was the most logical choice.
As a result, the Internal Revenue Service (IRS) linked the stimulus payment to a taxpayer’s adjusted gross income on their tax filings.
So, if you didn’t get the correct amount in the previous stimulus payment, a plus-up payment is just money owed to you.
More on Plus-Up Payment
“If their income in 2020 was lower than in 2019, allowing them to fall into the eligibility thresholds, or if they added a dependent in 2020. Some taxpayers will be entitled to plus-up payments when they file their 2020 tax return,” says Cassandra Kirby, Partner, chief operating officer, chief compliance officer, and wealth advisor at Braun-Bostich & Associates in Pittsburgh.
“Let’s imagine a married couple with one child earned $165,000 in adjusted gross income in 2019, and they were not eligible for any share of the third payment since their income was over $160,000. They had another child in 2020, and their adjusted gross income fell from $165,000 to $155,000,” she explains.
They would fall under the $150,000 to $160,000 level with an additional dependent in this situation, she claims and would be eligible for $2,800 in stimulus money.
There are other circumstances in which the IRS may award you additional monies. For example, if you married in 2020 and paid your 2020 taxes jointly this year, you might be eligible for a plus-up stimulus check or deposit.
Who Will Get a Plus-Up Payment?
“Some taxpayers will be entitled to plus-up payments when they file their 2020 tax return if their income in 2020 was lower than in 2019, allowing them to fall into the eligibility thresholds,” says Cassandra Kirby, Partner, chief operating officer.
“Let’s imagine a married couple with one child earned $165,000 in adjusted gross income in 2019, and they were not eligible for any share of the third payment since their income was over $160,000. They had another child in 2020, and their adjusted gross income fell from $165,000 to $155,000,” she explains.
They would fall under the $150,000 to $160,000 level with an additional dependent in this situation, she claims and would be eligible for $2,800 in stimulus money.
Plus Up Payment Calculator
Cnet has designed a new stimulus calculator that considers the parameters mentioned above to calculate your expected third stimulus payout.
To use the calculator, enter the information from your 2019 or 2020 tax return, depending on which you’ve already filed with the IRS.
Your filing status, adjusted gross income (AGI), and the number of qualifying dependents you have claimed must all be provided. When you click the “Calculate” button, the estimated stimulus payment will appear on the screen.
Be aware, however, that the phase-out mechanism for collecting payments is now in effect.
For every $1,000 over the AGI threshold of $75,000 for an individual taxpayer, $112,500 for a head of household, and $150,000 for a married couple filing jointly, the credit payment would be reduced by $50.
How Much Plus Up Payment Should You Get?
In this third stimulus wave, the IRS has changed most of the rules. First, the adjusted gross income (AGI), head of household, and joint couple filing requirements have been changed.
The dependent’s qualification has also been updated to cover newborns born this year. Finally, plus-up payments are provided for those whose eligibility is based on 2019 taxes rather than 2020 taxes.
When calculating how much of the third stimulus check you are entitled to, the IRS provided some helpful guidelines:
If your AGI exceeds the upper-income limit, you will not be eligible for benefits, even if you have dependents.
The age of dependents is no longer a factor. Newborn infants, college students, disabled adult children, and senior adult relatives identified as dependents are all eligible for $1,400.
Because plus-up payments are based on your most recent tax returns, you need to file for the 2020 tax returns in order to receive the additional funds.
Still Confused about How Much Plus-Up Payment You Should Get?
People who have received their third stimulus check but are underpaid by the amount they qualify for are eligible for the plus-up payment.
For instance, suppose you have lost your employment and your AGI has dropped below the amount you reported on your tax return. The IRS plus-up system gives you a separate payment for the extra money you qualify for.
Qualified receivers should calculate how much they may receive correctly so that the IRS can make their new plus-up payments accurately.
Will Everyone Receive a Plus-Up Payment?
You may be eligible for a plus-up payment if your income in 2020 was lower than it was in 2019.
This also applies to everyone who declared an elderly or disabled dependent on their tax return in 2020, as well as elderly or disabled relatives or college students who are in their care.
The deadline to file your 2020 tax return and thus be eligible for the plus-up payment is December 31, 2021, so it’s best to get started as soon as possible.
There are other circumstances in which the IRS may award you additional monies. For example, if you married in 2020 and paid your 2020 taxes jointly this year, you might be eligible for a plus-up stimulus check or deposit.
Still Haven’t Received your Stimulus Payment?
If you haven’t received your last stimulus payment, go to IRS.gov and type in “retrieve my payment.”
If you have not yet received your stimulus payment, you may want to consider completing a basic tax return, even if you are not required to do so.
How to Get a Supplemental Stimulus Payment
If you owe a plus-up, the IRS will automatically compute how much you owe based on your 2020 tax return, so all you have to do is make sure your tax return is submitted.
If you requested an extension to file your taxes, keep in mind that you must complete and process your 2020 return by Aug. 16 to receive a plus-up payment, according to Kiplinger.
If you’ve been expecting a check but haven’t received it, it’s likely that the IRS hasn’t processed it yet, as they’re still dealing with a significant backlog of 2019 tax returns.
What if the First Two Cheques aren’t Paid?
The only option to collect that money right now is to claim a Recovery Rebate Credit on your 2020 tax return.
There, all you need to know about plus up payment. Please follow the guidelines and link on this article, and you’ll be just fine.
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CSN Team.
