IRS to Send Out 50,000 Stimulus Checks Next Month
The IRS announced on August 25 through its website that it will send 50,000 stimulus checks next month.
The "catch-up" payments were related to a mistake that the IRS made in processing the original stimulus payment. Economic Impact Payment is said due to being issued in early-to-mid-September.
Tax refunds will be offset for several reasons, including outstanding debts. For instance, the IRS will reduce the taxpayer's return if that person has exceptional state income tax obligations. The CARE Act provided the IRS not to offset the payment by such obligations except past due child support, in the case of stimulus checks.
However, in the rush of sending out stimulus payments, the IRS withheld payments improperly from about 50,000 people. In this case, the IRS offset stimulus check for past due to child support is owed by their spouse. As per Forbes, those who filed Form 8379 or the Injured Spouse Allocation, offset also occurred with their 2018 or 2019 tax returns. Form 8379 effectively notifies the IRS not to withhold money from the injured spouses because their wife or husband has an outstanding balance.
The IRS identified the offset issue in May. The description of the problem, as indicated in the Economic Impact Payment Information Center, particularly question 31. The details are also written below:
"The IRS is aware that in some incidents, a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return (or 2018 tax return if no 2019 tax return has been filed) has been offset by the non-injured spouse's past-due child support. The IRS is coordinating with the Bureau of Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve this issue as quickly as possible."
The IRS said it was working to fix the issue at the time, but it did not give a timeline of when the payment would go out.
When would the "catch-up stimulus check come?
As the issue has been resolved now, the IRS said it would send out the payments early to mid-September. The fees will be mailed as physical checks and sent to those who filed Form 8379, including their 2019 tax returns. In some cases, the 2018 tax returns submitted would also be included. There is no added action for individuals to receive the payment, as per Forbes.
Meanwhile, those people who didn't file Form 8379 but had reduced their stimulus checks, for some reason, will also receive a "catch-up" stimulus check. However, according to the IRS, it'll take some time.
The IRS stated that these individuals also didn't take any action and did not need to submit Form 8379. Though IRS does not have a timeframe, it will automatically issue the portion of the EIP applied to the other debt of the spouse at a later date.
To check on the status of these payments, taxpayers can use the IRS Get My Payment tool.
On the other hand, according to Fox Business, the IRS wants to hire thousands of people to help the American households ensure that they will receive their economic impact payments and will collect all of the cash they are eligible for.
The tax agency reportedly plans to hire 5,000 seasonal employees to work from this month up to January in an update on operations detailed by staff members of the House Ways and Means Committee. The first group of seasonal employees is expected to start next month. The additional staffers are needed to address an influx regarding economic impact payments, as per the note.
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