If you’re confused about whether or not you’re eligible for a stimulus check or the economic impact payment, you’re not alone. In fact, most people are still trying to understand what these payments are, how they differ, and which one applies to them. The good news is that understanding the difference between a stimulus check and an economic impact payment isn’t as complicated as you might think.
To put it simply, the economic impact payment is actually the stimulus payment. The two terms are often used interchangeably, but they refer to the same thing. The purpose of the payment is to provide relief to American citizens during the ongoing COVID-19 pandemic. While the name implies that the payment is intended to provide economic support, it is primarily aimed at helping people cover their basic expenses during a time when many are facing financial difficulties.
The economic impact payment, or stimulus check, is a one-time payment that the federal government is providing to eligible American citizens. The amount of the payment is based on your income and other factors, and is intended to help people manage their financial obligations during the pandemic. While the payment won’t solve all of your financial problems, it can certainly help ease the burden during these challenging times. So if you’re eligible for the economic impact payment, be sure to take advantage of this opportunity and use the funds wisely.
Understanding Economic Impact Payment
The economic impact payment (EIP) was introduced by the United States government in the year 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The payment was intended to help individuals and families cope with the economic fallout of the COVID-19 pandemic. The EIP is also referred to as the stimulus payment, as it was intended to stimulate the economy by putting more money in people’s pockets.
- The EIP is not the same as a tax refund. It is a direct payment to eligible individuals regardless of whether they have paid taxes or not.
- The amount of your EIP depends on your income level, with most individuals receiving $1,200 and married couples receiving $2,400. Parents also receive an additional $500 per eligible dependent child.
- To be eligible for the EIP, you must have a Social Security number, be a U.S. citizen or resident alien, and not be claimed as a dependent on someone else’s tax return. There are also income limits that determine eligibility.
The EIP was automatically sent to eligible individuals and families based on their most recent tax return information or Social Security benefits statement. If you did not receive the payment, you may be able to claim it on your 2020 tax return.
Difference between Economic Impact Payment and Stimulus Check
While commonly used interchangeably, Economic Impact Payments and Stimulus Checks are not exactly the same thing. Here’s what sets them apart:
- Economic Impact Payments are technically the official term for the payments authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help individuals and families affected by the COVID-19 pandemic. They are also commonly referred to as “stimulus payments” or simply “stimulus checks.”
- Stimulus Checks, on the other hand, are a specific type of payment that the IRS issues to eligible taxpayers as part of Economic Impact Payments. They are typically in the form of a paper check or direct deposit, and the amount is calculated based on a person’s adjusted gross income (AGI) from their most recent tax return.
So, in essence, Economic Impact Payments are the broader term encompassing all payments authorized by the CARES Act, while Stimulus Checks are the actual physical payments issued by the IRS as part of that program. It’s important to clarify this distinction because the terms are often used interchangeably in the media and by the general public.
It’s worth noting that there have been other rounds of stimulus payments issued since the initial round of Economic Impact Payments in the spring of 2020. These include the second and third rounds of payments authorized by the Consolidated Appropriations Act and the American Rescue Plan Act, respectively. While these payments may be referred to as “stimulus checks” colloquially, they are essentially just subsequent rounds of Economic Impact Payments under new legislation.
The Bottom Line
The Economic Impact Payment and Stimulus Check terminology can be confusing, but the key thing to remember is that they are both referring to the same thing – payments authorized by the government to provide relief to individuals and families affected by the COVID-19 pandemic. Whether you call them Economic Impact Payments, Stimulus Checks, or something else entirely, these payments are a critical source of financial assistance for millions of Americans during a challenging time.
Comparison Table
| Economic Impact Payment | Stimulus Check |
|---|---|
| Official term for the payments authorized by the CARES Act | Physical payment issued as part of Economic Impact Payments |
| Broader term encompassing all payments authorized by legislation | Calculated based on a person’s AGI from their most recent tax return |
Ultimately, the two terms are largely interchangeable and refer to the same financial assistance program. Understanding the nuances can help you better communicate with your peers or colleagues about these payments and their role in COVID-19 relief efforts.
Eligibility Criteria for Economic Impact Payment
As part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the US government announced the Economic Impact Payment program (EIP), often known as the stimulus check. The program aims to provide financial assistance to individuals who are struggling to make ends meet amid the ongoing pandemic. Here are the eligibility criteria for the Economic Impact Payment:
- The program is available to US citizens, permanent residents, and qualifying resident aliens.
- The individual must have a valid Social Security number.
- They must not have been claimed as a dependent by another taxpayer.
To receive the stimulus check, the individual must satisfy all three requirements. The EIP program also has income limits based on the individual’s Adjusted Gross Income (AGI) from their most recent tax filings. The following table summarizes the income limits for the stimulus check:
| Filing Status | Adjusted Gross Income (AGI) | Payment Amount |
|---|---|---|
| Single Filers | Up to $75,000 | $1,200 |
| Head of Household | Up to $112,500 | $1,200 |
| Married Filing Jointly | Up to $150,000 | $2,400 |
| Additional Payment per Qualifying Child | N/A | $500 |
| Reduced Payment | $75,001-$99,000 (Single filers); $112,501-$136,500 (Head of Household); $150,001-$198,000 (Married filing jointly) | Reduced by 5% of the amount above the AGI limit |
| No Payment | Above $99,000 (Single filers); Above $136,500 (Head of Household); Above $198,000 (Married filing jointly) | N/A |
It’s essential to note that individuals on Social Security, Railroad Retirement, or disability benefits and do not file tax returns are also eligible for the stimulus check. They must have a Social Security number and must not have been claimed as a dependent by another taxpayer to receive the payment. Individuals can check their eligibility and payment status on the IRS website by using the ‘Get My Payment’ tool.
Will there be a second round of Economic Impact Payment?
As of August 2021, there has not been an official announcement about a second round of Economic Impact Payment. However, discussions about another stimulus check are still ongoing. The first round of Economic Impact Payment was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in March 2020, and a second round was authorized by the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020.
- President Biden has repeatedly voiced his support for another round of stimulus checks, and there have been proposals for additional direct payments in Congress.
- Some lawmakers and economists argue that another round of stimulus payments would be necessary to support individuals and families struggling to make ends meet due to the ongoing pandemic.
- Others, however, have voiced concerns about the cost of additional stimulus payments and the need to focus on other economic recovery measures.
It is important to note that if a second round of Economic Impact Payment is authorized, the eligibility criteria and the amount of the payment may differ from the first round. The first round of payments varied from $1,200 to $600 based on income level and family size.
| Income Level | Payment Amount |
|---|---|
| Single filers with AGI up to $75,000 | $1,200 |
| Married filing jointly with AGI up to $150,000 | $2,400 |
| Single filers with AGI between $75,000 and $99,000 | Reduced payment based on income |
| Married filing jointly with AGI between $150,000 and $198,000 | Reduced payment based on income |
| Single filers with AGI over $99,000 | No payment |
| Married filing jointly with AGI over $198,000 | No payment |
While the future of a second round of Economic Impact Payment is uncertain, it is essential to keep track of any updates and changes in eligibility criteria and payment amounts.
How to track Economic Impact Payment
For those who are eligible for the Economic Impact Payment or the stimulus check, it’s important to be able to track the status of their payment. Here’s how:
- Use the IRS “Get My Payment” tool on their website. This tool shows the status of your payment, including the date it was scheduled to be deposited or mailed.
- Check your bank account or mailbox regularly. Some individuals may receive their payment without warning, so it’s important to keep an eye out for any deposits or mail from the IRS.
- Call the IRS hotline at 1-800-919-9835 if you have not received your payment after three weeks since it was mailed or deposited.
It’s important to note that some individuals may not be eligible for the payment, such as those who exceed the income threshold or are claimed as dependents on someone else’s tax return. However, those who are eligible and have not received their payment should take action to track its status.
If you are having trouble accessing the “Get My Payment” tool or have other questions about your payment, the IRS website has a list of frequently asked questions and contact information for their customer service.
What to do if there’s an issue with your payment
If you have tracked your payment and believe there is an issue, such as an incorrect amount or missing payment, there are steps you can take:
- Contact the IRS customer service hotline at 1-800-829-1040 to discuss the issue with a representative.
- If you received an incorrect amount, you may need to file a 2020 tax return next year to reconcile the difference.
Common reasons for delays in payment
While many individuals should receive their payment promptly, there may be delays due to various factors:
- If the IRS does not have your direct deposit information, they will need to send a paper check or prepaid debit card, which may take longer to process and mail.
- If you have recently moved, the IRS may not have your updated address on file, causing delays in mail delivery.
- If there is an issue with your tax return, such as an incorrect or missing Social Security number, it may delay processing of your payment.
Economic Impact Payment Amounts
The amount of Economic Impact Payment or stimulus check varies depending on different factors:
| Filing Status | Adjusted Gross Income | Max Payment |
|---|---|---|
| Single filer | Up to $75,000 | $1,200 |
| Married Filing Jointly | Up to $150,000 | $2,400 |
| Head of Household | Up to $112,500 | $1,200 |
| Dependent Child | n/a | $500 |
The payment amount decreases for those who exceed the income thresholds and eventually phases out completely for those making over $99,000 (single), $136,500 (head of household), and $198,000 (married filing jointly).
Common issues related to Economic Impact Payment and their solutions
The Economic Impact Payment (EIP), also known as a stimulus check, has been much awaited relief for many Americans that have been financially impacted by the COVID-19 pandemic. However, there have been some common issues that some individuals have faced when receiving their payment. Here are some of these issues and their solutions:
- Delay in receiving payment: Some individuals may have experienced a delay in receiving their EIP. This could be due to a number of reasons, such as incorrect information on their tax return, change of address, or bank account issues. The solution is to visit the IRS website and use the “Get My Payment” tool to check the status of the payment. It will also allow individuals to update their bank account information if needed.
- Incorrect amount received: Some individuals may have received an incorrect amount for their EIP. This could be due to a number of reasons, such as filing a joint tax return with an individual who owes child support, or income changes since the last tax return was filed. The solution is to visit the IRS website and use the “Get My Payment” tool to check the amount of the payment received. If there was an error, individuals may need to file a tax return for the year 2020.
- Received payment for deceased individual: Some individuals may have received a payment for a deceased family member. The solution is to return the payment using the IRS instructions found on their website.
It is important for individuals to note that the EIP is not taxable income and will not affect any refund due for the year 2020. It is also important to keep in mind that the EIP is a one-time payment and does not provide ongoing financial assistance. Individuals are encouraged to stay informed about other available resources that may be able to assist them during this challenging time.
Overall, despite some common issues that individuals have faced, the EIP has provided much-needed financial assistance for many Americans during the COVID-19 pandemic.
Tax implications of Economic Impact Payment
As a recipient of the Economic Impact Payment (EIP), you may be wondering if it will have any tax implications. Here are some important tax considerations to keep in mind:
- The EIP is not taxable income and will not reduce your refund or increase your tax owed for the 2020 tax year.
- If you did not receive your full EIP amount, you may be eligible to claim the Recovery Rebate Credit on your 2020 tax return. This credit will either reduce your tax liability or increase your refund.
- If you were not eligible to receive the EIP based on your 2018 or 2019 tax returns, but have since become eligible, you can claim the credit on your 2020 tax return.
It’s important to note that the EIP is not considered income for any means-tested government programs, such as Medicaid, SNAP, or TANF. Therefore, it will not affect your eligibility or benefit amount for these programs.
Here is a table summarizing the tax implications of the EIP:
| Tax implication | Description |
|---|---|
| Not taxable | The EIP is not taxable income for the 2020 tax year. |
| Recovery Rebate Credit | If you did not receive your full EIP amount, you may be eligible to claim the Recovery Rebate Credit on your 2020 tax return. |
| Means-tested programs | The EIP will not affect your eligibility or benefit amount for any means-tested government programs. |
Overall, the EIP will not have any negative tax impact on your 2020 tax return and may even provide additional benefits through the Recovery Rebate Credit.
FAQs: Is the Economic Impact Payment the Same as a Stimulus Check?
1. What is the economic impact payment?
The economic impact payment, also known as a stimulus check, is a payment sent by the government to help ease the financial strain of the COVID-19 pandemic.
2. Is the economic impact payment the same as a tax refund?
No, the economic impact payment is not the same as a tax refund. It is a separate payment sent out to eligible individuals and families to provide financial relief during the pandemic.
3. Who is eligible for the economic impact payment?
Individuals who earned less than $75,000 in 2019 and married couples who earned less than $150,000 in 2019 are eligible for the full economic impact payment. There are also additional qualifications for dependents and non-filers.
4. How much money will I receive for the economic impact payment?
Eligible individuals will receive up to $1,200 and eligible married couples will receive up to $2,400. There are also additional payments for dependents under 17 years old.
5. Do I need to apply for the economic impact payment?
No, you do not need to apply for the economic impact payment. If you filed your taxes in 2018 or 2019 or receive Social Security benefits, you will automatically receive the payment.
6. When will I receive my economic impact payment?
The timing of when you will receive your payment depends on various factors such as how you receive your tax refund or Social Security benefits. However, most eligible individuals will receive their payment by direct deposit or mail within a few weeks.
Closing Thoughts
Thank you for taking the time to read about the economic impact payment and how it differs from a tax refund. During these uncertain times, it is important to stay informed about government relief programs that can help ease the financial burden. Be sure to check with the IRS or Social Security Administration for the most up-to-date information on the economic impact payment. Thanks for visiting and we hope to see you again soon!