Stimulus checks have begun flowing into bank accounts and mailboxes all over the U.S., but what should you do if you get a check for the wrong amount?
The stimulus checks, which are being sent to over 138 million Americans making under $75,000, are based off of either the 2018 or 2019 tax returns.
Single filers making less than $75K will get $1,200, married couples making $150,000 or less and filing jointly get $2,400, and each dependent child under 16 gets $500 added to the total amount. Couples with three kids start off with $3.900.
If you haven’t filed your 2019 tax return or filed at a later date, the IRS will default to your 2018 return, which is where many of the issues of underpayment or overpayment stem from.
That’s exactly what happened to one Chicago resident. Upon receiving his stimulus check, he noted a discrepancy, as the check only paid for one of his two children.
“My wife and I welcomed our second child last year. And we claimed him on our 2019 taxes when we filed back in February,” he told RADIO.COM.
“When our stimulus credit arrived in our family bank account it was incorrect, and exactly $500 (or one baby) short,” he added.
He began investigating and found that despite filing in 2019 and claiming his child as a dependent, the “Tax Foundation says the government sometimes uses 2018 taxes.”
Despite the error on checks that are meant to be an aid to Americans during this difficult time, he isn't upset.
“It’s understandable that there are some errors in rushing all of this money out to Americans. There’s enough to worry about right now and honestly I wouldn’t want to be on the phone for hours trying to resolve this now,” he admitted.
Instead, he found that he can claim a $500 credit for the child born in 2019 on the 2020 taxes.
“It looks like a little belated baby bump is coming our way next year at tax time,” he said optimistically.
Many Americans are in the same boat. Forbes reveals there’s not much you can do at the moment to fix the underpayment. The IRS will begin sending out letters explaining how the stimulus was paid, how much was paid, and how to reach them in case of a problem or error with the amount paid out.
The publication notes that the stimulus is an advance on a refundable tax credit for the 2020 tax year. When you file taxes next year, it will adjust your tax refund accordingly.
In other words, you will eventually get the money promised to you even if it means waiting a bit to get it all resolved.
Similarly, if you were sent too much by mistake, you should not spend the payment. It will likely get resolved when you do your taxes for 2020. One Indiana man was recently blown away when he opened up his bank account and saw that he had $8.2 million deposited into it instead of the $1,700 he was supposed to get. Unfortunately, he couldn’t keep it.
Some Amercians have even reported getting payments for someone who died.
A reason for this may be because the payments are based on 2018 taxes, so if a spouse passed in 2018 or 2019, they would be eligible for a payment. And according to the CARES Act, if a person who gets more than they have been entitled to, they cannot have their credit reduced "below zero" when they file their 2020 return, meaning that they would not have to pay the $1,200 back once they file taxes in 2020.