Don't Mess With Taxes

Remember last summer when we all suddenly learned that the letter from Donald Trump about the first COVID-19 economic impact payment was an official Internal Revenue Service notice?

Many of us thought it was a thinly disguised campaign mailer and tossed it. Others didn't even receive it. And many of those who held on to the document did so because they viewed it as a political artifact.

But the letter, officially known IRS Notice 1444, Your Economic Impact Payment, had details on how much money you received in connection with the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted on March 27, 2020.

Since then, there have been two more payments prompted by the coronavirus pandemic.

And the IRS is reminding us that we once again should get written, snail-mailed notification confirming the economic impact payment, or EIP, amounts we received.

COVID stimulus history: Since we all seem to have lost track of time during the pandemic and, for many of us, the associated isolation — I think it's officially the 416th day of March 2020 (or the days since March 11 of last year, when the World Health Organization declared the coronavirus outbreak a pandemic) — here's a quick EIP refresher.

The CARES Act back in March 2020 provided $1,200 per person ($2,400 for married filing jointly couples) and $500 for each qualifying child. This first EIP was dubbed, not surprisingly, EIP1.

The day after Christmas 2020, a bill to fund the federal government became law. It also included, among other items, the second EIP, or EIP2.  That came to $600 for single taxpayers and $1,200 for married couples who file a joint return and surviving spouses. Qualifying dependent children also netted their parents another $600 per youngster.

And then this March, President Joe Biden signed the American Rescue Plan Act (ARPA) into law and the IRS started distributing the third round of COVID payments. This third EIP — you guessed it, EIP3 — is the most generous, providing $1,400 per qualifying taxpayers (double that for married jointly filing couples) and $1,400 per each eligible, claimed dependent.

Many EIP limits + 2 tax years = ?????: Of course, there were income limits on just how much EIP you could get. And of course, they were different in each case. That meant you might have received EIP1 but not EIP2. Or got EIP2 but not EIP3. Or whatever myriad EIP permutations there are.

That's because the IRS used 2019 or 2020 tax returns to determine how much to initially send taxpayers in connection with EIP1 and EIP2. Since EIP3 became law in the midst of the 2020 tax return filing season, some people got their income info to the IRS in time for it to use that to determine EIP3 amounts.

And in the case of EIP1 and EIP2, if you didn't get the maximum based on 2019 earnings, but your 2020 income qualified you, you could claim them on your tax return.

Confusing enough?

The IRS shares your pain here, truly. But it swears that it's doing its best to get this last round of payments out as quickly as possible.

The IRS announced on Wednesday, April 28, that it has so far delivered approximately 163 million of this latest EIP3 round of COVID cash. Those payments are worth a total of nearly $384 billion.

If you haven't received your EIP3 yet, hang in there. It's on its way. The IRS says it will continue to send out EIP3s on a weekly basis.

The payments will go eligible individuals for whom the IRS previously did not have information, but who recently filed a tax return. In addition, once the IRS get 2020 tax year info via filings, those who qualify for a larger EIP3 than they got based on earlier info will get the remainder as a separate "plus-up" payment.

Notices on the way, too: In addition, the aforementioned notice detailing how much economic impact payment you got also will be sent. This one for EIP3 is known as Notice 1444-C.

Again, you don't have do anything with the notice as far as your filing this year or next. But you do need to keep it in your tax records.

And as another economic impact payment refresher, here are all the EIP notices the IRS has and/or will send, along with brief descriptions of the documents and what action, if any, you may need to take:

• Notice 1444, Your Economic Impact Payment. The IRS mailed this notice within 15 days after the first payment was issued in 2020. Some people received another Notice 1444 if the IRS corrected or issued more than one payment in the first round. Taxpayers who received a Notice 1444 but did not receive their first payment should review the frequently asked questions (FAQs) for instructions on what to do if their first payment is lost, stolen, destroyed or has not been received. People should keep this letter with tax year 2020 records.
  
  
• Notice 1444-A, You May Need to Act to Claim Your Payment. The IRS mailed this letter last year to people who typically aren't required to file federal income tax returns but may have been eligible for the first Economic Impact Payment. People who didn't get a first and second Economic Impact Payment or got less than the full amounts, may be eligible to claim the 2020 Recovery Rebate Credit and must file a 2020 tax return even if they don't usually file a tax return.
  
  
• Notice 1444-B, Your Second Economic Impact Payment. The law that authorized the second payment gave the IRS more time to mail Notice 1444-B after the second payments were issued. This means people likely received their second payment several weeks before Notice 1444-B arrived. Taxpayers who received Notice 1444-B but didn't receive the second payment should read the FAQs about what to do if their second payment is lost, stolen, destroyed or has not been received. People should keep this letter with tax year 2020 records.
  
  
• Notice 1444-C, Your 2021 Economic Impact Payment. The IRS is mailing this letter to people who received a third Economic Impact Payment. People should keep this letter with tax year 2021 records.

If you got any or all of these and kept them, welcome to my unofficial tax paperwork hoarder club!

If, however, you're less obsessive about paperwork, that's OK, too. While the IRS won't issue replacements of the EIP1-3 notices, if you want to doublecheck or confirm how much you got, you can find the amounts on your personal online IRS account.

You also can check the IRS FAQ page for more on the EIPs and notices.

And if you want to see more tax forms and documents, of which the 1444 notice series is a part, check out the ol' blog's Tax Forms Fiesta! page.

You also might find these items of interest:

• Dealing with that scary letter from the IRS
• Don't ignore that IRS letter and nine other tax notice tips
• IRS mails 260,000 failure-to-file notices, but admits many likely are wrong

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