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The IRS can send money electronically to taxpayers who have filed tax returns using direct deposit or bank account details. The government sends paper checks or debit cards to households that the Treasury Department cannot set up a bank account for.
The IRS will use 2020 tax return information to determine eligibility and verify the amount. The agency will use the 2019 record for households that have not yet filed taxes this year – including those who have used the “non-filer portal” for previous payment rounds.
The law allows full payments of $ 1,400 for those with adjusted gross income of up to $ 75,000 for individuals, $ 112,500 for heads of household, and $ 150,000 for married couples filing a joint tax return.
Payments are reduced for those with incomes above these thresholds. Payments are limited to individuals earning US $ 80,000, heads of households US $ 120,000, and couples earning US $ 160,000.
For those who have lost their jobs, the timing of filing a tax return has been made more difficult by a newly offered tax break for unemployment benefits.
The relief waives taxes on up to $ 10,200 in unemployment benefits received by individuals in the past year. This provides an incentive to delay filing tax returns for 2020. However, since a loss of income in 2020 can result in someone qualifying for a stimulus review, there may be an urge to file a tax return quickly to reflect that income to the IRS.