In general, eligible individuals will get their Stimulus Payments (also known as Economic Impact Payments) automatically and won’t need to take additional action. The IRS uses available information to determine the eligibility and issue the payments accordingly.

If you didn't get the first and second round of EIP released in 2020 or got less than the full amounts, you are eligible to claim the 2020 Recovery Rebate Credit on your 2020 US tax return. You can get that missing money, but you need to act soon by filing a 2020 US tax return with the IRS as the filing due date is approaching.

The third Economic Impact Payment (EIP) amount released in March 2021 is:

• US$1,400 for an eligible individual with a valid SSN (US$2,800 for married couples filing a joint return if both spouses have a valid SSN or if one spouse has a valid SSN and one spouse was an active member of the U.S. Armed Forces at any time during the taxable year) 
• US$1,400 for each qualifying dependent with a valid SSN or Adoption Taxpayer Identification Number issued by the IRS

Generally, someone is eligible for the full amount of the third EIP if they:

• are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and
• are not a dependent of another taxpayer and
• their adjusted gross income (AGI) is not more than:
• US$150,000 if married and filing a joint return or if filing as a qualifying widow or widower
• US$112,500 if filing as head of household (HOH) or
• US$75,000 for eligible individuals using any other filing status

Payments will be phased out if taxable income has met those AGI amounts listed below:

• US$160,000 if married and filing a joint return or if filing as a qualifying widow or widower
• US$120,000 if filing as head of household
• US$80,000 for eligible individuals using any other filing status

The third payments differ from the earlier payments in several respects:

• Income phaseout amounts changed.
• Payment amounts are different. The third round of EIP is higher (i.e. US$1,400 per person) This means a single person with no dependents will get US$1,400, while married filers with two dependents will get US$5,600.
• Qualifying dependents expanded. The third payment is not restricted to children under 17. Eligible individuals get a payment based on all their qualifying dependents claimed on their returns, including older relatives like college students, adults with disabilities, parents, and grandparents.

If you need help on any personal US tax advice, please feel free to contact us at tax@zetland.biz or at 852 3552 9085.