The Covid Economy

Didn't get your full stimulus check? The IRS has started sending supplemental payments based on 2020 income

Evgenia Parajanian | iStock | Getty Images

If your third stimulus payment was a little smaller than it should have been, you may receive a fourth deposit from the Internal Revenue Service (IRS) soon. The agency says it has started sending supplemental payments to those eligible for a new or larger payment based on their 2020 tax returns.

The IRS started sending the third payments, worth up to $1,400 for eligible taxpayers and their dependents, in March, before it had time to process many 2020 tax returns. That was bad news for taxpayers who technically would have qualified for more money based on their 2020 return than 2019, who feared they'd have to wait a year to receive a tax credit for the full amount.

But the IRS announced last month that taxpayers wouldn't have to wait to have their payments topped off. In fact, some taxpayers should have already received a supplemental payment, the agency says.

The "plus-up" payments, as the IRS is calling them, are being sent on an ongoing basis to people who are eligible for more money based on their 2020 adjusted gross income (AGI) or if they had a new child or dependent.

If a single taxpayer earned an AGI of $80,000 in 2019 and $70,000 in 2020, for example, she would have received $0 based on her 2019 income, but the full $1,400 based on 2020.

The "plus-up" payments will continue on a weekly basis. Though the tax filing deadline was pushed back to May 17, those who would receive more stimulus money based on their 2020 return should file as soon as they can to get the supplemental payment. Taxpayers can also claim the 2020 Recovery Rebate Credit on their returns to get missing money from the first two rounds of stimulus payments.

Additionally, the IRS confirmed that it started sending payments to Social Security and other federal beneficiaries who didn't file a 2020 or 2019 tax return. Most of these recipients should get their payments electronically by April 7.

So far, the IRS has sent over 130 million payments during the third round, worth an estimated $335 billion.

Don't miss: What to do if you haven't received your third stimulus payment yet

Check out: Meet the middle-aged millennial: Homeowner, debt-burdened and turning 40

How a 25-year-old making $62,000 in NYC spends her money
How a 25-year-old making $62,000 in NYC spends her money