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The IRS Is Fixing a Glitch That’s Delaying Stimulus Payments

Here's what you need to know.

The economic devastation caused by the COVID-19 pandemic is frightening. Precipitous downturns on stock market graphs are only outdone by even steeper rises in the unemployment rate. Millions of workers have been furloughed, had their hours and/or pay cut, or been laid off outright.

The CARES Act is the third federal law addressing the crisis, a $2 trillion relief package that includes $250 billion for direct payments to Americans. They started to go out this week—despite a “glitch” that’s delaying payments for many—but there are already rumblings of future payments coming from Congress, as the current financial disaster appears quite durable.

Here’s what you need to know about the direct payments that have already been signed into law, the glitch that’s delaying them, and what might future payments could look like.

What’s the Deal With This Glitch?

Many people who used tax software like TurboTax and H&R Block have not yet received their money via direct deposit as expected. The IRS says the delay is because it doesn’t have their direct deposit information on file, a claim that TurboTax, for one, disputes. Regardless of who’s to blame, up to 21 million people could be in this situation, according to the Washington Post.

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The IRS does appear to be making some progress on the issue. It’s scheduled three three-hour maintenance windows for the Get My Payment tool on April 23, 24, and 25. Anecdotally, it seems that in the midst of these repairs that people (including me) who were getting an error message when the tool first rolled out are now being allowed to input their bank account information for direct deposit.

The deadline to enter your direct deposit information into the Get My Payment tool is noon on May 13. Miss it and you’ll have to wait longer for a check to arrive in the mail.

I Haven’t Received My Payment Yet. When Can I Expect It to Arrive?

It’s difficult to say even for those unaffected by the glitch. Different agencies and officials have issued different estimates, and most of them have been hedged—”at the earliest,” “the week of,” etc. That makes certain timelines difficult to deduce, as does the last-minute addition of the president’s name to the paper checks.

Last week’s press release from Rep. Debbie Dingell of Michigan is the most detailed accounting of when the distribution of CARES Act funds will occur that we’ve seen (though it did occur before news of the glitch broke). The 60 million payments to Americans who used direct deposit on their 2018 or 2019 tax returns started this week, as Dingell promised.

Per the congresswoman, a second round of electronic payments is due to go out within ten days of the first. They will go to Social Security beneficiaries who did not file tax returns in for 2018 or 2019 but still receive their benefits through direct deposit.

After the direct deposits have been sent out, checks will be issued in reverse adjusted gross income order. According to the Washington Post, “Checks for earners of $20,000 or less would be in the mail May 1, followed by those with incomes of $30,000 on May 8, $40,000 on May 15, and continuing in income increments of $10,000 each week.”

The IRS can print about five million checks a week, so basic arithmetic says that if checks are printed starting in early May, millions won’t have their checks mailed until mid-August, which means they might not receive them until September — five months after payments began.

How Much Will My Stimulus Payment Be?

Every American adult with a Social Security number and an adjusted gross income of $75,000 or less is already eligible to receive $1,200 in the mail. For married couples, those amounts are doubled ($2,400 for income up to $150,000). Parents will receive an additional $500 for each minor in their household.

So, if you and your spouse have two kids, filed jointly the last time you did your taxes, and had less than $150,000 in combined adjusted gross income on that filing, you’re in line for $3,400.

Individuals making between $75,000 and $99,000 would receive smaller payments, $5 less for every $100 over $75,000 in income.

Importantly, these calculations will be based on adjusted gross incomes for 2019, if already filed, or 2018, if not for those who file taxes. If you’ve had a change in income, it could affect the amount of your stimulus and have yet to file your taxes, that’s something to consider, particularly given that you won’t have to file until July 15 this year.

Do I need to do anything to receive my CARES Act payment?

Probably not. If you filed taxes for 2018 or 2019, your payment will be calculated automatically.

Social Security recipients who don’t file taxes will also receive their funds automatically after the administration reversed an early decision to require them to file a simplified tax return to qualify.

Other people who don’t file taxes, eligible citizens and permanent residents with 2019 income below $12,200 ($24,400 for couples), and anyone else who was not otherwise required to file a federal income tax return for 2019 and didn’t plan to does have to do something. The IRS has set up a portal to collect the information needed to verify their eligibility and remit payment. Not using this portal means, for these folks, not receiving the stimulus they deserve.

Presumably, the IRS could use the information it used to distribute the funds for the CARES Act payments for any future payments that might become law, but it’s a presumption until there’s actually some legislation to examine.

Are Future Payments a Possibility?

Yes, but they are far from certain, or even likely.

Speaker of the House Nancy Pelosi has spoken about the necessity of a so-called “Stage 4” bill that could allocate more than a trillion dollars of funding, including direct payments, possibly on a recurring basis. Members of her party have begun promoting their ideas for such a bill.

But while Trump says that he’s open to another stimulus, he’s not actively advocating for one. He’s also letting others in his party use handwringing about socialism and the deficit as excuses to avoid future stimulus payments. At this point, it looks like the first stimulus payment will quite likely be the last.

This story is developing. For the latest information from the IRS, visit irs.gov/coronavirus.