Tuesday, May 12, 2020



I have received several emails from clients asking about their 2019 refunds and 2020 stimulus payments, and I expect many taxpayers have similar questions.  So here are the answers.

 (1) The offices of the Internal Revenue Service were closed at the end of March due to the pandemic.  Mail sent to the IRS was not opened and manual returns were not processed.  As a result, refunds requested on manual returns were not issued.  The Service reopened its offices on April 27 and called back some employees to handle what it called “mission-critical functions” such as opening the piles of mail and processing manual returns.  However, subsequent virus-related issues indicate that the delay in processing returns, current and amended, and issuing refunds will continue. 

(2) In many cases when inquiring about the status of your 2020 stimulus payment at the IRS website you will need to enter information from your 2018 tax return.  Unless you filed your 2019 return in February or early March the information from your 2019 return is not in the IRS system.

(3) Just because the IRS cashed your check for payment of a balance due sent with your 2019 manually filed return does not mean your 2019 return has been processed.  Manual returns with payments are sent to bank lock-boxes.  The check is promptly deposited and the return is sent to the IRS for processing. 

(4) If you are receiving Social Security benefits that are directly deposited this does not mean your 2020 stimulus payment will automatically be directly deposited to your bank account.  This only applies if you are a “non-filer” – for example your only source of income is Social Security and you do not have to file a federal tax return.  The IRS will only directly deposit these payments for those who file federal income tax returns if it has the direct deposit information for a refund requested on the 2019, or more probably 2018, return.

(5) The date of mailing, or direct deposit, of your 2020 stimulus payment is based on the Adjusted Gross Income (AGI) on your 2019, or more likely 2018, tax return.  The greater your AGI the later your payment will be issued.

(6) In many cases the economic stimulus payment you received, or will receive. is calculated based on your 2018 AGI, because your 2019 Form 1040 or 1040-SR, if filed, had not been processed when the amount of the checks was calculated.  The IRS offices were closed down from the end of March until the end of April and 2019 returns were not being processed.  So, your check may be less than the actual amount to which you are entitled.  However, according to the IRS website, as of this writing, “The IRS is not able to correct or issue additional payments at this time and will provide further details on IRS.gov on the action people may need to take in the future.”

(7) The economic stimulus payment is administered via new Internal Revenue Code Section 6428.  IT IS NOT TAXABLE INCOME.  The payment will be treated as an “advance credit”, like the Obamacare advance premium credit, and must be reconciled, based on 2019 information, when preparing your 2020 tax return next year.  If you are entitled to more than you actually received in 2020 you can claim the additional amount as a refundable credit on your 2020 Form 1040 or Form 1040-SR.  If you received more than you should have you do not have to pay back the excess.  

(8) As of this writing the deadline for filing your 2019 federal and state income tax returns, and paying any balance due, is July 15, 2020.  This has not been further extended to September, October or December.

(9) Perhaps most important – there is absolutely nothing your tax preparer can do to expedite the processing of your 2019 tax return or 2020 stimulus payment or the issuance of your 2019 refund or 2020 stimulus payment checkDo not ask your tax preparer why you have not received your  2019 refund or your stimulus payment yet, or when you will get it.  If you want to find out about your stimulus payment go here.

Now when I receive an email question from a client, I can simply provide a link to this post.


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