Free Guide to IRS Economic Impact Payments in 2023

What Were the Economic Impact Payments?

Economic Impact Payments, commonly called stimulus checks, were one-time cash payments sent by the federal government to millions of Americans during the COVID-19 pandemic. These payments occurred in three separate rounds between 2020 and 2021. The first round began in April 2020, the second in December 2020, and the third in March 2021. Each payment represented an effort by Congress to help people maintain their financial stability during economic disruption caused by the pandemic.

The first Economic Impact Payment provided up to $1,200 per adult and $500 per qualifying child. The second payment increased the amount to $600 per adult and $600 per child. The third payment, often called the American Rescue Plan payment, went up to $1,400 per person regardless of age. In total, these three rounds distributed more than $800 billion to American households.

These payments were based on information from your 2019 or 2020 tax returns. The IRS used this tax information to determine who received payments and how much. Most payments were deposited directly into bank accounts, though some were mailed as paper checks or prepaid debit cards. Understanding how these payments worked helps explain the IRS records that may affect your 2023 tax situation.

By the end of 2021, the payment programs had ended. However, the payments created important tax records and information that taxpayers needed to report on their 2020 and 2021 tax returns. Some people received more money than they were supposed to receive, while others received less. Tracking your payment amounts was important for filing accurate tax returns in the years that followed.

Practical Takeaway: If you received Economic Impact Payments in 2020 or 2021, the amount you received should be documented in your IRS records. This information is relevant when reviewing your past tax returns or understanding your current tax situation.

How Payment Amounts Were Calculated

The IRS used a formula to determine payment amounts for each round. This formula took into account your income and the number of people in your household. The income thresholds were different for different filing statuses, meaning single filers, married couples filing jointly, and heads of household had different limits.

For the first payment in 2020, the full amount ($1,200 per adult, $500 per child) went to people whose adjusted gross income fell below $75,000 for single filers, $150,000 for married couples filing jointly, and $112,500 for heads of household. If your income exceeded these amounts, your payment was reduced by $5 for every $100 of income over the threshold. This meant some higher-income people received smaller payments, and those above certain income limits received nothing.

The second payment followed a similar structure but with different thresholds. Single filers with income up to $75,000 received the full $600 payment per person, with reductions for higher incomes. The third payment in 2021 used the same income limits as the second payment but with $1,400 per person instead of $600.

An important detail involved dependent children. For the first payment, only children under 17 counted as dependents for the $500 payment. This meant families with older dependents in college or other situations did not receive an extra payment for them. Later payments expanded the definition of dependents in some cases.

The IRS based these calculations on your most recent tax return available at the time. If you filed your 2019 return before payments began, the IRS used 2019 information. If you had not yet filed your 2019 return, the IRS used 2018 information. Later payments used 2020 information when it became available.

Practical Takeaway: Understanding your payment calculation helps you verify whether you received the correct amount. If your life circumstances changed significantly between filing your tax return and receiving payments, your payment amount might not have matched your actual financial situation.

Who Received Payments and Common Situations

The vast majority of Americans received at least one Economic Impact Payment. The IRS attempted to reach nearly every person in the country who had filed a tax return in recent years. Payments went to working people, retirees, students with income, people with disabilities receiving benefits, and others across the income spectrum.

Citizens and resident aliens were generally able to receive payments. Certain noncitizens, including those with Individual Identification Numbers (ITINs), could not receive payments in most cases. Members of the military stationed overseas, federal employees, and most other working Americans received payments through the normal process.

Some situations created complications. If you were claimed as a dependent on someone else's tax return, you generally did not receive your own payment, even if you were an adult with your own job and income. This affected college students whose parents still claimed them on tax returns, adult children living with parents, and other dependent adults. The payment went to the person claiming the dependent instead.

People without a Social Security number or with identity verification issues faced delays or non-receipt of payments. The IRS prioritized security to prevent fraud, which sometimes meant legitimate filers had to take additional steps to receive their payments or claim them later on their tax returns.

Incarcerated individuals were not supposed to receive payments, though some did due to processing errors. The IRS later worked to recover these payments. People who passed away before payments were sent generally should not have received payments, though some families received payments in a deceased person's name and had to return them.

Those with very low income who did not file tax returns could still receive payments if they registered with the IRS through a special non-filer tool created for this purpose. This allowed people with income below the filing requirement to get their payments without filing a full tax return.

Practical Takeaway: Reviewing who you know received payments can help you understand your own situation and whether any of these complications might have affected your household.

Tracking Your Payments and Checking Records

The IRS sent notices about Economic Impact Payments, typically arriving by mail within a week or two of when the payment was sent. These notices showed the payment amount, the date it was sent, and how it was delivered (direct deposit, check, or debit card). Keeping these notices was helpful for your records, though not required to file your taxes.

The IRS created a tool called "Get My Payment" that allowed people to check their payment status during 2020 and early 2021. This tool showed whether a payment had been sent, how much it was, and how it was being delivered. However, this tool is no longer available since all payments were completed by late 2021.

If you need current information about your payments, you can contact the IRS directly. The main IRS phone line is available during business hours. You can also visit an IRS office in person with documentation of your identity and tax situation. The IRS website at irs.gov contains general information about the payments.

Your payment amount should appear on Form 1040-C or similar IRS documentation if you received a payment. This form was provided to help you track what you received for tax purposes. If you filed a tax return for 2020 or 2021, your tax filing should reference the payments you received and whether you were required to claim any repayment amounts.

Some people received payments but did not have clear records of the amount. If you cannot locate your original notices, you can estimate your payment based on the calculation rules described earlier in this guide. If your income matched the full payment thresholds and you had no dependents, you received the maximum amount for that round.

For record-keeping purposes, it helps to document what you remember about your payments: the approximate date received, the amount, and whether it came as a deposit to your bank account, a mailed check, or a prepaid debit card. This information may be useful if questions arise about your 2020 or 2021 taxes.

Practical Takeaway: While the IRS tools for checking payments are no longer available, the IRS can provide past payment information if you request it. Keeping any original notices you received is the easiest way to document what you got.

Common Issues and What They Mean for Your Taxes

Some people received more in Economic Impact Payments than they were supposed to get based on their actual income and situation. This happened for various reasons. Some people's income decreased