The plus-up stimulus refers to additional or supplemental stimulus payments sent out in 2021 to provide further economic relief during the COVID-19 pandemic. The American Rescue Plan Act signed into law in March 2021 authorized these extra payments for those who were eligible for the full amount of the third stimulus payment based on their 2020 tax returns. The key factors determining plus-up payment eligibility and amounts include income levels, number of dependents, and filing status. This article will provide a comprehensive overview of everything you need to know about the plus-up stimulus payments.
What are the plus-up stimulus payments?
The plus-up payments, also referred to as supplemental or additional stimulus payments, are extra stimulus checks sent out by the IRS in 2021 to people who received stimulus payments based on their 2019 tax returns but then qualified for a larger payment based on their 2020 tax filing.
When the third round of Economic Impact Payments was initially distributed in March 2021, the IRS used the most recent tax return information they had on file, which for most people was from 2019 or 2018. However, by the time 2020 tax returns were filed, many people’s incomes and family situations had changed such that they qualified for a larger stimulus payment.
To account for this, the American Rescue Plan Act authorized supplemental plus-up payments to be sent to make up the difference between what individuals initially received based on older tax data and what they actually qualified for when their 2020 details were taken into account.
Who is eligible for a plus-up payment?
In general, those who are eligible for a plus-up payment are people who:
– Qualified for a third stimulus payment based on their 2020 tax return
– Received an initial third stimulus payment based on their 2019 tax return
– Qualify for an additional or larger payment based on their 2020 details
More specifically, eligibility depends on your:
– Adjusted gross income (AGI)
– Number of dependents
– Filing status
We’ll break down eligibility requirements in more detail for each of these key factors:
AGI requirements
For the third stimulus payment, the full amounts were $1,400 per individual or $2,800 per married couple filing jointly. Additional $1,400 payments were allotted for each dependent child.
The phaseout thresholds for reduction and elimination of payments based on AGI were:
– $75,000 for single filers
– $112,500 for heads of household
– $150,000 for married couples filing jointly
So in summary, if your AGI based on your 2020 tax return was lower than the above thresholds for your filing status, whereas your 2019 AGI was over the threshold resulting in a reduced payment, you may be eligible for a plus-up.
Dependents
If you claimed more dependents on your 2020 return than 2019, you may qualify for additional $1,400 payments per added dependent. This includes children, college students under age 24, older adult relatives, and other qualifying dependents.
Filing status
If your filing status changed from 2019 to 2020, for example due to marriage, divorce, or death of a spouse, your eligibility and payment amount may also change.
For example, if you filed as single in 2019 but married and filed jointly for 2020, your income threshold doubles to $150,000 making you newly eligible if your joint income is under that amount.
How much are the plus-up payments?
The amount of your plus-up payment depends on the difference between your initial third stimulus payment based on 2019 data versus the amount you actually qualify for based on your 2020 details.
Some key factors determining specific plus-up amounts include:
Change in AGI
If your AGI decreased from 2019 to 2020 enough to qualify or increase your base payment amount, your plus-up will be the difference.
For example:
– 2019 AGI: $90,000 as single filer -> Initial $700 payment
– 2020 AGI: $60,000 as single filer -> Eligible for full $1,400 payment
– Plus-up payment = $1,400 – $700 = $700
Additional dependents
The plus-up payment will include an additional $1,400 for each dependent added on your 2020 return that was not accounted for in your initial payment.
For example:
– 2019 return: 2 dependents -> Initial $4,200 payment
– 2020 return: 3 dependents -> Eligible for $5,600 payment
– Plus-up payment = $5,600 – $4,200 = $1,400
Change in filing status
As noted above, changes in filing status can impact payment amounts. Plus-up payments will rectify underpayments or ineligibility based on your new 2020 status.
For example:
– 2019: Filed as single, over income threshold -> $0 payment
– 2020: Filed jointly with spouse, under $150K threshold -> Eligible for $2,800 payment
– Plus-up payment = $2,800
When will plus-up payments be issued?
The vast majority of plus-up payments were issued by the IRS between April and October 2021. However, the final deadline for issuing payments was December 31, 2021.
According to the processing schedule, plus-up payments were made after tax returns were processed. Direct deposits were made first, followed by paper check mailed.
Here is a breakdown of when payments went out:
April 2021
First batch of plus-up payments sent via direct deposit. These were based on 2020 tax returns filed and processed by February 24, 2021.
May 2021 – October 2021
Recurring batches of plus-up payments sent out weekly on an ongoing basis, both via direct deposit and mailed checks.
December 31, 2021
Final deadline for issuing plus-up payments for 2021 tax year.
The IRS will not issue any more plus-up payments for 2021 taxes. However, eligible filers can claim the Recovery Rebate Credit on their 2021 return for any plus-up amounts they did not receive but qualified for.
How will I receive my plus-up payment?
The delivery method for your plus-up payment matches how you received your initial third stimulus payment:
– Direct deposit for those with bank account info on file
– Paper check mailed to address on latest tax return
The payment will be clearly labeled as IRS TREAS 310 TAXEIP3 in your bank transaction history if sent via direct deposit. For mailed checks, the memo line will indicate TAXEIP3.
Do I need to take any action to get a plus-up payment?
The key requirement for the IRS to determine your eligibility and issue a plus-up payment is filing a 2020 tax return. This allows them to compare your 2019 and 2020 details.
You do not need to request or apply for a plus-up payment. If you qualify based on your tax returns, it will be sent automatically by the IRS.
However, if you have not yet filed your 2020 return, you should do so as soon as possible to ensure the IRS has your latest information. The 2020 tax filing deadline was extended to May 17, 2021.
Can I track my plus-up payment?
Yes, you can check the status of your plus-up payment using the IRS Get My Payment tool online at www.irs.gov/coronavirus/get-my-payment.
To use the tool, you will need to provide basic personal details including:
– Social Security Number or Individual Tax ID Number
– Date of birth
– Street address
The tool should show your payment status, confirm whether it was sent via direct deposit or mail, and provide the expected delivery date if pending.
What if I didn’t receive my plus-up payment?
If you qualify for a plus-up payment but have not received it, you have a few options:
File a payment trace
If it has been at least 5 days since the IRS Get My Payment tool indicates your plus-up was mailed, you can request a payment trace by calling the IRS or submitting IRS Form 3911. This will help track status and recover the payment if it was lost or stolen.
Claim the Recovery Rebate Credit
On your 2021 tax return, you can claim any missing stimulus funds including plus-up payments by filing the Recovery Rebate Credit. This will either reduce your tax liability or provide a larger refund.
Seek assistance
You can contact the IRS customer service number at 800-919-9835 for help resolving any issues receiving your proper stimulus payment amount.
Will I owe tax on my plus-up payment?
No, the plus-up stimulus payments do not count as income. Therefore, you will not owe any federal or state income tax or need to report the payments on your tax return.
However, since the payments are actually an advance on a tax credit (Recovery Rebate Credit), you must reconcile on your 2021 return if you received more than you were eligible for based on 2021 details.
Can plus-up payments be garnished?
No, plus-up payments cannot be garnished by creditors or debt collectors to cover outstanding debts or payments owed. The payments are protected under the Taxpayer First Act.
If your payment is seized, you should contact the creditor or debt collector involved as well as the IRS for assistance.
Are deceased individuals eligible?
Under the American Rescue Plan, if an individual died before January 1, 2021, they are not eligible for either the initial third stimulus or plus-up payment. Only surviving spouses may be eligible to claim the payment.
However, a plus-up payment would be issued based on 2020 return details if an eligible individual filed a 2020 return before passing away in 2021. In this case, the plus-up is authorized and would need to be returned.
Can immigrants receive plus-up payments?
To be eligible for stimulus payments, individuals must have a Social Security Number (SSN) valid for employment. An SSN starting with 9 digit SSN are not eligible.
The only exception is members of the armed forces with an Adoption Taxpayer Identification Number (ATIN). Non-citizens in this category with an ATIN can qualify for payments.
Lawfully present immigrants are also included. This group encompasses green card holders as well as those with work authorization who have an SSN valid for employment.
Undocumented immigrants remain ineligible for all stimulus payments including plus-up amounts.
Do I have to pay back an excess plus-up payment?
If your plus-up payment was accurate based on your 2020 details that determined eligibility, you can keep the full amount.
However, if your 2021 tax situation changes such that you no longer qualify for the amount you received in 2021, you will need to reconcile this on your 2021 tax return by:
– Reporting the accurate Recovery Rebate Credit amount you qualify for in 2021
– Paying back any plus-up funds that exceed that amount
For example, if your payment was based on having 3 kids, but you actually only had 2 kids in 2021, you would owe back the excess payment for the third dependent.
Conclusion
In summary, the plus-up stimulus payments provided essential additional economic relief to households who experienced income or dependent changes making them newly eligible for larger stimulus payments.
While most plus-up payments have already gone out based on 2020 tax data, some eligible recipients may still need to claim the funds on their 2021 taxes. Understanding the eligibility requirements, when payments were issued, delivery methods, and what to do if you never received a plus-up payment you qualify for ensures you receive this vital additional COVID-19 stimulus support.
