COVID Tax Tip 2021-72, May 21, 2021
While the third round of Economic Impact Payments continue to be made automatically to most people, the IRS can’t issue a payment to eligible Americans when information about them isn’t available in the tax agency’s systems.
Economic Impact Payments, also known as stimulus payments, are different from most other tax benefits.
People don’t need a permanent address, a bank account or even a job to get these payments. Individuals may qualify for this money if they have a Social Security number and are not being supported by someone else who can claim them as a dependent.
Eligible people who haven’t received these payments should file a 2020 tax return, even if they don’t usually file. This will give the IRS information needed to send them a payment. Those experiencing homelessness may list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on their tax return.
Those who missed either of the first two payments can still get this money by filing a 2020 tax return and claiming the recovery rebate credit. Filing a 2020 tax return is the only way, eligible people can receive the money from the first or second payments now. Most people can use IRS Free File to provide very basic information. There’s even a special section on IRS.gov that can help: Claiming the 2020 recovery rebate credit if you aren’t required to file a tax return.
The credit will be included in the filer’s tax refund. The IRS will send any third EIP amount they are eligible for separately after their return has been processed. Using IRS Free File to file a tax return and choosing direct deposit is the quickest and safest way to get a refund.
The American Rescue Plan expands EITC and the child tax credit benefits for the 2021 tax year. Some people will be able to get advance payments of the child tax credit later this year. There is nothing those who qualify need to do at this point other than file a 2020 tax return.
Options for those without a bank account
People who don’t have a bank account should visit the Federal Deposit Insurance Corporation website for details on opening an account online or use the FDIC’s BankFind tool to locate an FDIC-insured bank.
BankOn, American Bankers Association, Independent Community Bankers of America, National Credit Union Administration have lists of banks and credit unions that can open an account online. Veterans, see the Veterans Benefits Banking Program for financial services at participating banks.
Many reloadable prepaid cards or mobile payment apps also have account and routing numbers that individuals can provide to the IRS to get their payments.
Individuals experiencing homelessness can also receive the EITC
For people experiencing homelessness who have a job, filing a tax return often carries a bonus — getting a refund based on various tax benefits, especially the earned income tax credit for low-and moderate-income workers and working families.
To get the credit, federal law requires that a worker live in the U.S. for more than half of the year and meet other requirements. This means living in a home in any of the 50 states or the District of Columbia. Therefore, individuals experiencing homelessness, including those who stay at one or more homeless shelters, can meet that requirement.
Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, no tax, or even get a tax refund. The amount varies depending on the worker’s income, marital status, and other factors.
To find out if they’re eligible, people can use the EITC Assistant on IRS.gov. It’s available in both English and Spanish.