New payments in connection with COVID-19: why you should rush to filing a declaration for 2020
On Friday morning, February 5, the Senate approved a budget resolution that would allow President Joe Biden to pass a $ 1,9 trillion aid package without Republican support. But lawmakers agreed to limit who can receive the $ 1400 check and indicated that selection rules could be stricter than in previous rounds of payments. Reported by Newsweek.
The Internal Revenue Service (IRS) is likely to determine eligibility and distributions based on the most recent tax returns filed by US residents. Taxpayers must file their 2020 personal return by April 15, but those whose incomes fell last year due to the ongoing coronavirus pandemic may want to file earlier to receive a larger check. Conversely, those whose incomes increased in 2020 may receive higher pay if they wait and file documents after the checks are issued.
According to the Senate Finance Committee, Congress is expected to order the latest personal income data for 2019 or 2020 to be used when checks are ready for distribution. The IRS will begin accepting tax returns on February 12, and individuals who file before checks are issued will receive an amount based on their 2020 income tax return. Those who apply after distribution of payments will receive an amount based on their 2019 income tax return.
According to the American Rescue Plan, people earning more than $ 75 will receive less pay, and people with higher incomes may be completely withdrawn from the program. The Senate recently overwhelmingly approved a bipartisan amendment proposal pioneered by Senators Joe Manchin of West Virginia and Susan Collins of Maine to prevent high-income taxpayers from receiving payments.
Americans may have to file their 2020 tax returns in the next few weeks to take advantage of the opportunity to use their latest income for a third payment. On Friday, February 5, the Senate backed Biden's $ 1,9 trillion bailout package, and Vice President Kamala Harris voted strongly to agree on the budget. This would allow Democrats to quickly take this measure without Republican support.
Congress will now have to approve amendments to deliver the package, and Pelosi said the law would be "absolutely certain" to pass by March 14, the unofficial deadline set by Democratic lawmakers to approve further aid.
“Hopefully in two weeks we will send something to the Senate, and it will be done well before the expiration of the initiatives,” said the Speaker of the House of Representatives, adding that Congress “will complete work by the end of February.”
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The IRS will begin processing payments shortly after Biden signs the package. It is currently unclear if Congress will require the IRS to forward the difference to those who receive payments based on their income in 2019 but are eligible for more money based on their income in 2020.
David Cutter, who last year served as the Treasury's top tax official at the time of the bailout, told The Wall Street Journal that the IRS could fund its account after receiving its 2020 tax returns. But he noted that the process could be postponed until the end of the tax filing season.
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