Coronavirus stimulus checks: IRS may inform by letter why you got less than expected

Coronavirus stimulus checks: IRS may inform by letter why you got less than expected
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The IRS is likely in the last phase of sending out the third round of stimulus checks, but there are many who are still not convinced they received the correct amount with their first and second stimulus payments. Some people believe they got less than what they were eligible for, while some got no payment at all. Now these people have an opportunity to clear up their doubts by filing the Recovery Rebate Credit. If the IRS doesn’t agree with their calculation, it will issue them a letter validating the coronavirus stimulus check amount they got.

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Q1 2021 hedge fund letters, conferences and more

Coronavirus stimulus check: when will IRS send you a letter

Congress approved $1,200 and $600 in stimulus payments in the first and second round last year, respectively. However, many people say their stimulus check amount was much less than what they were eligible for, or they got no payment at all.

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Such people can claim their due payment of the first two rounds by filing the Recovery Rebate Credit. They need to complete line 30 of Forms 1040 or 1040-SR, which has been added to this year’s tax return forms.

In this form, the taxpayer needs to mention the amount of stimulus money they already received. Also, they need to show any more stimulus amount due to them. People can show the workings in the worksheet provided with the tax form.

Once the IRS gets your tax return, as well as the form for the Recovery Rebate Credit, it will analyze your form. This means, filing for the credit is no guarantee that you will get the due amount you think you are eligible for.

In case of a discrepancy, i.e. where the IRS believes your calculation of the amount due is wrong, the agency will send you a letter to clear up the confusion about the amount due.

Reasons for discrepancy

Some of the reasons for a discrepancy could be if you did not provide a valid Social Security number, or if you were claimed as a dependent by someone else on their 2020 tax return.

Also, as per the terms of the first two rounds, a dependent age 17 or more as of Jan. 1, 2020 would not be eligible for the stimulus payment. Any math calculation error on your part could also prompt the IRS to send you a letter.

Separately, filing the 2020 tax return could help you get more payment in the third round if your income dropped in 2020. Moreover, filing the 2020 return could also get you a stimulus check if the government doesn’t have your information on file, or you normally don’t file a return.

Those who receive federal benefits will get the payments automatically. In case they want to submit the details of eligible dependents, they may have to file a tax return. The last date to file a federal tax return is May 17.

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