Tax Guy: ‘I think my son got a $1,200 stimulus payment he wasn’t entitled to. Will the IRS take the money back?’ Answers to your stimulus check questions

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As everybody knows by now, the Feds are using our beloved Internal Revenue Service to distribute so-called Economic Impact Payments (EIPs) to many Americans, also known as “stimulus checks.” Singles can receive up to $1,200, married couples can receive up to $2,400. Your under-age-17 kids are worth up to another $500 each. However, EIPs are phased out at higher income levels — based on your 2019 Form 1040 if you’ve already filed it, or your 2018 Form 1040 if you have not.

Complicating matters is the fact that the IRS is not currently processing 2019 returns. The agency is swamped with all the new COVID-19-related tasks it has been given. Worse yet, the IRS’s data processing systems were notoriously inadequate even before getting overwhelmed with all the new tasks.

Meanwhile, we are receiving good questions from readers about how the whole EIP scheme is supposed to work in various circumstances. With this column, I’ll try to answer some of those questions. Full disclosure: I’ve edited them and added a few of my own. Here goes.

Q: What’s the deal with the IRS Get My Payment link?

A: Go to this website and then click on Get My Payment link. You will be asked to supply some basic information and then supposedly find out the status of your EIP. However, this online tool apparently works only if you’ve previously set yourself up to have federal income tax refunds automatically deposited to an account. Well, in that case you should be receiving your money any minute now, if you’ve not already received it. Check with your bank. The Get My Payment link is basically useless for you, because your payment is either already in your account or will be very soon.

Q: What if you are not set up for automatic deposit and are waiting for a paper check?

A: According to the government, your EIP check could take up to five months to arrive. Your payment amount will be based on information on your 2019 Form 1040 if you’ve filed it or your 2018 Form 1040 if you have not. Unfortunately, if you go to the IRS Get My Payment link, you may be unable to learn anything about the status of your check. You may be told that the IRS lacks the information to respond. So pack a lunch, set up a lawn chair in front of your mail box, and good luck to you. If anyone out there has had a different experience with Get My Payment, please let me know with a comment.

Q: My 2019 income was significantly more than my 2018 income. I’ve already filed my 2019 Form 1010. I would have qualified for an EIP using my 2018 income but not using my 2019 income. Is there any way to ‘take back’ my 2019 return so the IRS will only look at my 2018 income for EIP qualification? I’m now unemployed and the money would help.

A: I have bad news and good news. I don’t think there’s any way to “take back” your 2019 return. However, you’ll eventually get your rightful EIP sometime next year, probably way too late to do you much good. The little-known fact is that the EIP is actually an advance tax credit for your 2020 tax year. If your 2020 income is low enough to qualify for the full credit (it probably will be), you’ll receive your rightful $1,200 after you’ve filed your 2020 Form 1040 next year. You’ll use your 2020 return to “true up” your rightful EIP amount. The IRS is using 2019 and 2019 tax return information to get EIPs out as quickly as possible (by government standards). In your situation, you’ll have to wait.

Q: I’m a 19-year-old college student. My dad claimed me as a dependent on his 2018 return. I have not filed my 2019 return yet. Can I get an EIP if I file my 2019 return right now and my dad does not claim me as a dependent on his 2019 return?

A: Yes. The real question is how long it will take the IRS to process your 2019 return and your dad’s 2019 return. In your situation, processing those returns is necessary to determine your eligibility for an EIP. As I said earlier, the IRS is not currently processing 2019 returns, so you could be in for a long wait. Make sure you supply automatic deposit information with your 2019 return. That will speed things up. We hope.

Q: I have not received my EIP, and I think I know why. I was claimed as a dependent on my parent’s 2018 return. I’ve already filed my 2019 return and received a refund. My parents already filed their 2019 return, and they already received their $2,400 EIP. Will I get my EIP?

A. Yes, assuming your parents did not claim you as a dependent on their 2019 return. If they did claim you as a dependent for 2019, you won’t get your rightful EIP until you’ve filed your 2020 Form 1040 next year, as explained in answer No. 3. However, as I said earlier, the IRS is not currently processing 2019 returns. If your 2019 return has not yet been processed, it could a while before you get your rightful cash. How long? Who knows?

Q: In 2019 I made too much money to be eligible for an EIP. Unfortunately, I was laid off in November of last year and given a severance package that put my 2019 income over the EIP phase-out threshold. Is there anything I can do to receive an EIP?

A: Yes, but not anytime soon. As explained in answer No. 3, you’ll receive your rightful EIP in the form of a tax credit that you can claim on your 2020 Form 1040, when you file it sometime next year.

Q: I’m an independent 24-year-old who works while attending college part time. On my 2019 Form 1040, I accidentally checked the box that says I could be claimed as a dependent on another return (my parents’ return). My parents did not claim me as a dependent for 2019 and they did not claim me for 2018 or 2017 either. Will I still receive an EIP? Or should I file an amended 2019 return on Form 1040-X to ‘uncheck’ the box that says I was claimed as a dependent on another return?

A: Unfortunately, there is no place on Form 1040-X to “uncheck” that box. In your specific situation, I think the only solution is to file your 2020 Form 1040 next year to “true up” your rightful EIP amount, as explained in answer No. 3. That will involve a long wait. Maybe the IRS will come up with a quicker way to solve your problem. But don’t hold your breath, because I think it’s pretty unusual.

Q: I believe that my adult son received a $1,200 EIP, via automatic deposit to his checking account, that he was not entitled to because he is my tax-return dependent. Will the IRS go into his checking account and debit it to get the money back?

A: No. The statutory language in the CARES Act that set the whole EIP scheme in motion says that anybody who gets more money than they are actually entitled to can keep the excess. I endorse that concept: any money that gets into people’s hands is fair game.

Q: I did not have enough income to file a Form 1040 for 2018 or 2019. How can I get my EIP?

A: The IRS website now offers an online tool for non-filer like you. Go here and follow the instructions. Will this work in a timely fashion? We shall see. If any of you out there have used this tool, please tell us about your experience in the comments.

Q: My only income is from Social Security benefits, and I don’t have to file tax returns. My Social Security benefit payments are automatically deposited to my checking account. Will I get an EIP?

A: Yes. You are not included in the first wave of about 80 million EIP recipients, because you did not file a 2019 or 2018 tax return. Folks in that first wave have already received their money or will very soon. You’ll be in the second wave. Your payment will be automatically deposited into the same account used to receive your Social Security benefit payments. Check with your bank periodically. You should not have to wait too much longer. I hope.

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