New Stimulus Payments
What You Should Know About the New Round of Payments
The Federal government is preparing to send a second Economic Impact Payment, or Stimulus Payment, to help Americans cope with the financial difficulties brought on by the COVID-19 pandemic. Here is the latest information about the upcoming Economic Impact Payment (EIP). For more details, visit the IRS website.
As of 1/4/2021, we understand that a large numbers of EIPs may have accidentally been sent to tax preparers who received payments for customers during the first round of EIPs. As a result, many people have not yet received the second EIP in their bank accounts. In addition, the IRS “Get My Payment” portal might not accurately reflect the current situation for affected people.
On 1/10/2021, the IRS announced that it will reissue some Economic Impact Payments that were mistakenly sent to tax preparers. Currently, the payments are expected to be issued around February 1.
The IRS is working as quickly as possible to correct the problem, and no action is required by affected individuals as they wait for their payments. We will update this page with further information as it is announced by the IRS.
We know many Bay Federal members are anxiously awaiting financial support from the government. If you are having trouble paying your bills or are behind on monthly payments, there is help available. Please consider speaking with a GreenPath financial counselor. The service is free and confidential. You don’t have to do this alone. We also have options to help members affected by the pandemic.
Fraud related to Covid-19 is on the rise because of the second economic stimulus payments. Protect yourself from financial loss by remembering that:
- The IRS will not contact you by phone, email, or text about your Economic Impact Payment or any taxes owed. If you receive a suspicious email or text, do not respond or click any links.
- Bay Federal will never contact you by phone, email, or text to ask for your online banking password, card PIN, or other confidential information. If you receive a suspicious communication related to Bay Federal, contact us immediately at 831.479.6000 or 888.4BAYFED, option 3.
Who is eligible for the second Economic Impact Payment?
U.S. citizens, including children, and resident aliens who are not claimed as a dependent on someone else’s income tax return are eligible for the payment.
How much money will I receive from the second Economic Impact Payment?
Eligible individuals will automatically receive up to $600 ($1,200 for married couples) and up to $600 for each qualifying child. The amount you receive will be based on your adjusted gross income for 2019; see the IRS website for more information.
Do I need to do anything to receive the payment?
- If you received the first Economic Impact Payment earlier in 2020, there is nothing you need to do to get a second payment.
- If you did not receive a payment in 2020, you may be eligible to claim a Recovery Rebate Credit, which could increase your 2020 tax refund or reduce the amount of income tax you owe.
When will I receive my payment?
Most people will receive their payment as a direct deposit into their account during the first week of January 2021. All eligible individuals should receive a payment by January 31, 2021. Log into BayFedOnline to find out if you have received your Economic Impact Payment.
To check the status of your payment, use the “Get My Payment” tool on the IRS website. Expect frequent updates to “Get My Payment” and check back if it is unavailable.
How will I get my payment?
If you are eligible for a payment, your payment will arrive one of three ways:
- As a direct deposit into the same account where you received your 2019 federal tax refund or a previous Economic Impact Payment. The payment will be noted in your account summary as “IRS TREAS 310 XXTAXEIP2” or something similar.
- As a paper check. Checks can be deposited with the BayFed Mobile app on your smartphone, at any Bay Federal Credit Union branch or ATM, or by mail to 3333 Clares Street, Capitola, CA 95010.
- As a debit card.
What happens if Congress increases the payment amount from $600 to $2,000?
If Congress votes to increase the second Economic Impact Payment, the additional funds will be delivered to you as quickly as possible.
If I did not receive the first Economic Impact Payment, can I still get it?
If you did not receive the maximum amount of the first Economic Impact Payment—$1,200 for individuals or $2,400 if married, plus $500 for each qualifying child—or you missed the deadline to register for the payment, you may be eligible to claim a Recovery Rebate Credit when filing your 2020 taxes. This credit may increase your 2020 tax refund or reduce the amount of income tax you owe.
Will I have to pay income tax on my Economic Impact Payment?
According to the IRS, Economic Impact Payment funds are not taxable, should not be included on your Federal income tax return as income, will not reduce your Federal tax refund or increase the tax amount you owe when you file your 2020 income tax return, and will not affect income used to determine eligibility for federal government assistance/benefits programs. For more information, consult with a tax professional or visit the IRS website.
What’s Happening with Unemployment Benefits?
Unemployment benefits programs were reinstated when the second Economic Impact package was signed into law. Congress has added $300 per week to regular state-issued unemployment payments for every unemployed person. People who are receiving federally-funded Extended Benefits or Pandemic Unemployment Assistance benefits will also receive the additional $300 per week. State and federal agencies report that the $300 payments may take 3-6 weeks or more to begin. Information on applying for unemployment and other benefits related to the Coronavirus pandemic can be found on the US government website.
Will I have to pay income tax on unemployment benefits?
You might, but that depends on the type of program paying you the unemployment benefits. To find about how unemployment benefits are taxed, visit the IRS website.
Should I call or visit a branch if I have questions about my payment?
Due to social distancing, wait times on the phone and at branches will likely increase because of Economic Impact questions. Since Bay Federal will not have access to the status of your Economic Impact Payment before you receive it, we recommend using the following resources to get information:
- Log onto BayFedOnline with your computer or mobile device to monitor your account for direct deposit of your payment.
- Check the status of your payment with the “Get My Payment” tool on the IRS website. Expect frequent updates to “Get My Payment” and check back if it is unavailable.
- Get updates on the IRS website.