Tax Tips — June 01, 2020

Didn’t Get Your Full Stimulus Payment? Here’s the Problem—And How to Fix It

by Susannah McQuitty

Wondering what to do about your missing EIP?

While most Americans have received their stimulus payments authorized by the CARES Act, many are left with more questions than answers. Getting a smaller Economic Impact Payment (or EIP) than expected has thrown quite a few taxpayers for a loop.

The good news is that in many cases, you could actually receive the remaining amount in the future. Let’s look at a few common situations that have caused some people to get smaller EIPs than expected and how to fix the situation.

Why did the IRS use my 2018 tax return and give me a smaller payment because of it?

Sounds like the IRS sent your EIP before your 2019 tax return was filed and processed. In those cases, your 2018 tax return was used to calculate your payment—so the size of your EIP would reflect your 2018 finances instead of 2019.

Let’s look at an example. Say you and your spouse had a child born in 2019; the CARES Act allows an additional $500 per child aged 16 or younger, but when you get your payment, those five Ben Franklins are nowhere to be seen. If the IRS is using your 2018 tax return to process your payment, they simply didn’t realize your child existed.

So, what happens now? Since the EIPs are technically advance tax credits for your 2020 return, any amount that you should have received can be claimed when you file your taxes next year. Going back to our example, you should be able to claim that $500 as a refundable credit in 2021.

The problem: Since the IRS either hadn’t received or hadn’t processed your 2019 tax return, your 2018 information was used instead.

How to fix it: Don’t sweat it! You should be able to claim the remaining amount when you file your taxes next year.

Why didn’t I get the extra $500 for one or more kids?

Let’s spend a little more time with this $500-for-each-kid hurdle, while we’re at it. Besides the reasoning provided in the example above, the most common reason why one of your child dependents isn’t showing up on your stimulus payment is that they are actually too old.

Based on the CARES Act, the additional amount per child only applies to dependents who are 16 years old or younger. That’s a real bummer for parents of older kids, and not just them—if your teen or adult child is claimed as a dependent on your return, they won’t get a stimulus check of their own.

While there’s nothing parents of older children can do to get the $500, there is a chance that teen and young adults could get stimulus money in 2021. How? By filing independently for their 2020 tax return and not being claimed as a dependent on their parent’s taxes. If you’re a teen or young adult transitioning to being self-sufficient this year, that’s great news!

The problem: Your child is too old to qualify you for the additional $500 stimulus money.

How to fix it: While there’s nothing parents can do, teens and young adults who file independently for their 2020 tax returns and aren’t claimed as dependents on their parent’s taxes should be eligible to claim a “stimulus” tax credit when they file their taxes next year.

Did my ex-spouse get the extra $500 for one or more of our kids?

The additional amount for each kid can get complicated enough on its own—we’ve seen that from the last two examples. When you add split households to the mix, the potential for confusion only goes up.

Fortunately, the solution is pretty simple and great news for both parties: If you and your ex-spouse usually trade years to claim the dependent and your spouse got the extra amount in their EIP, you should also be eligible to get an additional $500 when you file your taxes next year. It’s a rare case where “double-dipping” is allowed, or maybe a better way to put it is ignored.

The problem: Your ex claimed your child as a dependent on their recent tax return, so they received the additional $500.

How to fix it: You should also be eligible to claim the additional $500 as a tax credit when you file your taxes in 2021.

Why did part of my stimulus check go to child support?

Just like tax refunds, stimulus checks are subject to offset by any back child support. If you had not made some or all of your payments by the time the IRS released your stimulus money, any past due amount would have been garnished from your EIP.

The problem: Since you were behind on your child support, part of your stimulus money was withheld to offset your support owed.

The solution: Unfortunately, any money that went to child support will not show up in your 2020 tax refund.

Check out IRS.gov for more info

Have you run into a different scenario? Let us know in the comments below.

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