Personal Finance

Is your stimulus check less than you expected? This may be why

Key Points
  • Millions of payments of up to $1,200 per individual have been sent.
  • Many people have wondered, "Why is my payment less than I expected?"
  • The IRS is providing answers to that question.
  • For some, brace yourself for disappointment.
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Millions of Americans have eagerly awaited their $1,200 stimulus checks only to find that the amount they received was less than they expected.

That has left them asking one question: Why me?

If that's you, brace yourself for disappointment. The IRS is now providing answers with new guidance. Here's a look at some of the reasons you might have gotten less:

1. The IRS hasn't processed your 2019 return

Stimulus checks are part of a $2 trillion package authorized by Congress. The legislation calls for using past tax returns from either 2018 or 2019, whichever is most recent, to determine your eligibility for a stimulus payment.

The payments will be up to $1,200 for individuals or $2,400 for married couples who file jointly, plus $500 for qualifying dependents. The payments are targeted at individuals making up to $75,000 and couples who earn up to $150,000 in adjusted gross income. Above that, the checks are reduced, and they eventually phase out completely at $99,000 in income for individuals and $198,000 for married couples.

If you have filed your tax return for 2019, but it has not yet been processed by the IRS, the government will base your stimulus payment on your 2018 return.

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But your income could have been lower or higher in that year than it is now. Or, you could have added another child to your family.

Any additional money that you should receive based on your current circumstances may be claimed when you file your 2020 tax returns. That includes $500 payments for eligible children under 17.

2. Your dependents don't qualify

There are other reasons why you may have received a stimulus check that didn't include $500 payments for your children.

First, eligible dependents need to be younger than age 17, in keeping with the definition for the child tax credit. That means older children, such as college students, or adult dependents do not qualify.

Second, they must be able to be claimed as a dependent. That can include your own children, or fostered or adopted children. It can also include grandchildren, nieces or nephews or siblings, as long as they can be claimed as a dependent on your tax return.

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For parents who are not married, only one person can claim the dependent on their tax return and receive a stimulus payment for that child.

In addition, children must be either a U.S. citizen, permanent resident or qualifying resident alien. They must have either a valid Social Security number or an Adoption Taxpayer Identification Number. If they have an Individual Taxpayer Identification Number, they are not eligible for stimulus money.

3. You are behind on your bills

If you check all the boxes and you're still confused as to why your stimulus check fell short, it could be because you are behind on certain other payments.

One big reason your payment could be offset: past-due child support. You should receive a notice from the government if an offset happens for this reason.

In addition, your stimulus check is not protected by federal law from garnishment by creditors. Some states, however, do have laws that put those kinds of protections in place.

What about more money?

If you truly feel that you received less stimulus money than you should have, you may be right.

The IRS answer to this is that you will be able to reconcile that discrepancy next year when you file your 2020 tax return. More information on what you will need to do will be provided on the agency's website.

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