3 Types of Checks the IRS Issued This July and Who Got Them

The IRS has been keeping busy this summer by not only sending out millions of individual income tax return refunds, but also three additional types of checks that many Americans are set to receive.

Some will get this additional money via direct deposit and others will receive a check for their payment. Here are the details about the three different types of checks from the Internal Revenue Service and who is entitled to the compensation this summer.

#1: Advance Child Tax Credit

Due to the American Rescue Act, all eligible families are provided with an enhanced child tax credit, which is being paid via advance payments from the government. The new credit allows for a payment of up to $300 per month for each child under the age of six and up to $250 per month for those ages six through 17. The advanced child care tax credit, which is half of the yearly allotted credit, is offered to individuals with earnings up to $75,000 annually, joint tax filers up to $150,000, and head of household up to $112,500. Most families that receive the credit will see payments begin in July and end in December of 2021.

#2: Economic Stimulus Payment

The last installment of government stimulus payments was paid out to those who recently filed a 2020 tax return. This included over 900,000 individuals who received “plus-up” payments because their previous stimulus check amount was based on 2019 tax instead of their 2020 tax returns, which gave them more money. The original stimulus payment amounts were $1,400 per person, which included single filers with adjusted gross income (AGI) up to $75,000, married filing jointly filers with AGI up to $150,000, and also each dependent of these filers. These checks are still currently being processed each week throughout the summer.

#3: Unemployment Compensation Tax Refunds

Those who received unemployment compensation due to COVID issues early on may not have received the full tax break when filing their 2020 tax returns. The American Rescue Plan allows up to $10,200 of unemployment benefits in 2020 to be nontaxable. Due to this late change, many people overpaid the amount of taxes actually due on their 2020 unemployment compensation. Instead of having to submit a revised tax form, the IRS will make the changes and issue refund checks and direct deposits, with an average amount of $1,260 to 2.8 million people over the summer.

Those who are due to receive an economic stimulus payment or unemployment tax refund should expect to see it sometime this summer, while the advanced child care tax credit will show up as a monthly payment through the end of the year. The status of the stimulus and unemployment tax refunds cannot be tracked; however, the IRS has created a useful tool to help manage the advanced child care tax credit payments for your convenience.