My USA tax clients have started receiving third economic payment from Internal Revenue Service, * U S Treasury department, U S government. I am enclosing below the relevant website details for reference and shall cover the relevant information in this article. All information traces their origin to IRS website and I am totally bound by it.

https://www.irs.gov/coronavirus/third-economic-impact-payment

There are thousands of US tax paying residents in India who are also ignorant about these payments from IRS*. Let me explain in details the relevant information.

General information

The third round of Economic impact payments was authorized by the American Revenue Plan Act of 2021 as an advance payment of the tax year 2021 recovery rebate credit. Many US Tax payers are already aware of IRS sending the third Economic impact payments to eligible individuals on March 12, 2021. IRS has informed in its website that it would continue to send Economic impact payments weekly in 2021 as 2020 tax returns are being processed. Payments would be sent to eligible people for whom IRS did not have the required information to send the payment but who recently filed a 2020 tax return.

Plus- up payments

IRS has been sending additional or plus-up payments to people who:

  • Already received a third Economic Impact Payment based on a 2019 tax return or information received from SSA, RRB or VA
  • Eligible for a plus-up payment based on their 2020 tax return

 One can check the status of your third Economic Impact Payment or “plus-up” payment with Get My Payment under IRS website.

IRS advises its tax payers not to call the IRS as their phone assistors would not have information beyond what is available on IRS.gov.

For more information, see  the Questions and Answers about the Third Economic Payment.

IRS Notice 1444-C is being mailed to people who received a third Economic Impact Payment. Keep this letter with your tax year 2021 records.

Eligibility

It is possible that most eligible people won’t need to take additional action to get a third payment. This is good news. We have been informed that due to new income limitations, some individuals won’t be eligible for the third payment even if they received a first or second Economic Impact Payment or claimed a 2020 Recovery Rebate Credit.

Let us learn the eligibility criteria from IRS itself.

Generally, someone is eligible for the full amount of the third Economic Impact Payment if they:

are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return)?

are not a dependent of another taxpayer, and their adjusted gross income (AGI) is not more than?

$150,000 if married and filing a joint return or if filing as a qualifying widow or widower

$112,500 if filing as head of household or

$75,000 for eligible individuals using any other filing status.

Payments will be phased out – or reduced — above those AGI amounts. This means people will not receive apayment if their AGI is at least:

$160,000 if married and filing a joint return or if filing as a qualifying widow or widower

$120,000 if filing as head of household

$80,000 for eligible individuals using any other filing status.

Let me introduce you to a special reminder for those who normally don’t file a tax return.

Special Reminder for Those Who Don’t Normally File a Tax Return.

People who don’t normally file a tax return and don’t receive federal benefits may qualify for stimulus payments. This includes those without a permanent address, an income or bank account.

If you’re eligible and didn’t get a first or second Economic Impact Payment (that is, an EIP1 or EIP2) or got less than the full amounts, you may be eligible for the 2020 Recovery Rebate Credit, but you’ll need to file a 2020 tax return.

Most eligible people won’t need to take additional action to get a third payment.

The IRS will use available information to determine your eligibility and issue the third payment to eligible people who:

  • filed a 2020 tax return
  • filed a 2019 tax return if the 2020 tax return has not been submitted or processed yet
  • did not file a 2020 or 2019 tax return but registered for the first Economic Impact Payment with the Non-Filers tool in 2020
  • are federal benefit recipients who do not usually file a tax return.

The IRS is working with Federal agencies to get updated information for recipients to ensure they are sending automatic payments to as many people as possible. More information about when these payments will be made is provided in the March 30 news release and the April 14 news release.

Third Payments Differ from Previous Economic Impact Payments

The third payments differ from the earlier payments in several respects:

  • Income phaseout amounts changed. Payments begin to be reduced for individuals with adjusted gross income of more than $75,000 (or $150,000 if married filing jointly). The reduced payments end at $80,000 for individuals and $160,000 for married filing jointly. People above these levels will not receive any payment.
  • Payment amounts are different. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents will get $1,400, while married filers with two dependents will get $5,600.
  • Qualifying dependents expanded. Unlike the first two payments, the third payment is not restricted to children under 17. Eligible individuals will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents.

How do I request a payment trace to track my third economic impact payments?

This is one of the most often asked questions and precise answer is given as under by IRS.

“If Get My Payment shows your payment was issued as a direct deposit audit is more than 5 days after the payment date, your first step is to check with your bank and make sure they didn’t receive a deposit. Do not check with your bank prior to 5 days because they may not have any information.

You should only request a payment trace to track your payment if Get MyPayment shows a payment was issued to you and you have not received it within the timeframes below. IRS assistors cannot initiate a payment traceunless it has been:

5 days since the deposit date and the bank says it hasn’t received the payment

4 weeks since the payment was mailed by check to a standard address

6 weeks since the payment was mailed, and you have a forwarding address on file with the local post office

9 weeks since the payment was mailed, and you have a foreign address.

Note: If you have a foreign address, there may be international service disruptions at the United States Postal Service (USPS) or the foreign country you are in due to the COVID-19 pandemic.”

I have come across in New Delhi, US Embassy officials personally calling US citizens to hand over their payment checks in case they did not reach them. I am amazed by their sincerity and commitment to serve U S Tax payers in letter and spirit.

A very simple but common question often raised by US Tax payers pertains to the way in which IRS process the claims of its tax payers.

Here is the process simplified:

  • IRS will process tax payers’ claim for a missing payment in one of two ways:

If the check was notcashed, it will issue a new one. If tax payer finds the original check after receiving a new payment, the original should be returned as soon as possible.

  • If the check wascashed, the Treasury Department’s will send tax payer a claim package that includes a copy of the cashed check. The instructions issued are to be followed.
  • The Treasury Department’s Bureau of the Fiscal Service will review tax payer’s claim and the signature on the canceled check before determining whether the payment can be reversed and a new payment should be issued.

To start a payment trace:

Call IRS at 800-919-9835

Mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund.

We regular U S tax consultants are aware of the undue delay in receipt of telephones by IRS associates due to reduction in their staff strength on account of various reasons.

To study form 3911.

It is reproduced from IRS web site.

https://www.irs.gov/pub/irs-pdf/f3911.pdf

Let us explain the form.

Titled “Taxpayer Statement Regarding Refund”, it has the following 4 sections.

1. Section 1 which calls the basic information like name, address, telephonic information, all information to be renewed if changed after filing of the tax return. (Serial numbers 1 to 7)

2. Section II. Refund Information. ((Serial numbers 8 to 12). Information like bank details, whether refund check was not received, lost or stolen, or details of bank account like routing number etc.

3. Section III (Serial numbers 13 to 14) self- signature or spouse signature in case of a joint account.

4. Section IV Totally devoted for IRS internal work purposes.

What is the time frame to get response?

Tax payer will generally receive a response 6 weeks after IRS receives the request for a payment trace, but there may be delays due to limited staffing. One can get up-to-date status on affected IRS operations and services. One is advised not to mail Form 3911 if tax payer has already requested a trace by phone.

IRS has given a warning as under:

“If you mail or fax the form prior to the timeframes above, your request will not be processed until those timeframes are met.”

If tax payer is in India, the address for refund is given below:

A foreign country, U.S. possession or territory*, or use an APO or FPO address, or file Form 2555 or 4563, or are a dual-status alien.

Austin Internal Revenue Service

3651 S Interregional Hwy 35

Austin, TX 78741

855 203 7538 (fax number)

Conclusion

Regularly, I receive telephonic calls from my tax clients who file US Taxation enquiring about their refund though all their tax papers are prepared and filed electronically by me as a CPA but the pandemic made the system haywire and frequent telephones have not materialized. The purpose of this article is to explain the procedure for claiming or enquiring about payment checks which will explain the detailed way to tackle the issues professionally.

Being the best operated tax system in the world, IRS has set up in the past a wonderful tax refund as well as redressal system, envy of other tax regimes in the world. But like every one the recent pandemic wrecked the whole world trade and postal systems are the worst affected in USA as well as in India. So, I would advise immense patience for US Tax payers while dealing with receipts of tax payments.

*****

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author/TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional

Author Bio

Qualification: Post Graduate
Company: subramanian natarajan cpa firm
Location: NEW DELHI, Delhi, India
Member Since: 09 May 2017 | Total Posts: 157
A banker with 27 years of experience, a CPA from USA with specialization in US taxation, individual, partnership, S corporation or LLC taxation etc View Full Profile

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