IRS to mail stimulus checks to 50,000 Americans after error

By Megan Henney FOXBusiness

The IRS is sending out “catch-up” stimulus checks to about 50,000 Americans in September after an error the agency made in rushing to deliver the original cash payments.

In an announcement on Monday, the IRS said it would send the money to eligible individuals who’d had a portion of their economic impact payment diverted to pay their spouse’s past-due child support, despite filing Form 8379, Injured Spouse Allocation.

The form effectively notifies the federal government to not withhold money from one person if their husband or wife has an outstanding debt for which they are fully responsible.

CALCULATE HOW MUCH MONEY YOU’D RECEIVE FROM THE SECOND STIMULUS CHECK HERE

The payments will be mailed in early-to-mid September. The spouses do not need to take any action in order to receive the cash. The individuals will also receive their 2019 federal income tax return and, in some cases, their 2018 return.

While Congress is deadlocked on another coronavirus relief package, millions of Americans are still awaiting the arrival of their first $1,200 cash payment.

At the beginning of June, the IRS still had to pay out between 30 million and 35 million checks, according to the House Ways and Means Committee.

But two months later, the agency “appears to have made little progress towards issuing the remaining payments,” a letter from House Ways and Means Chairman Richard Neal and Sen. Ron Wyden, the top-ranking Democrat in the Senate Finance Committee, says.

Between early June and late July, the IRS had made fewer than 1.5 million additional stimulus payments, an “unacceptable pace,” the lawmakers said.

A SECOND STIMULUS CHECK IS LIKELY – AND 26M MORE PEOPLE MIGHT GET CASH THIS ROUND

“Americans cannot wait any longer for the emergency assistance they were told would arrive in the spring,” the letter, dated July 27, said. “Treasury must take immediate and decisive action to pay all eligible Americans.”

At the end of June, IRS Commissioner Chuck Rettig testified the agency had distributed some 160 million economic impact payments, worth roughly $270 billion, since April. During that testimony, Rettig said the IRS was dealing with a backlog of paper tax returns and was focused on trying to send stimulus payments to those filers.

The IRS reportedly intends to hire 5,000 people to help distribute the payments.

More than 14 percent of households making under $50,000 have not received their stimulus payment yet, according to a study released by Prosperity Now, a research and policy organization based in Washington, D.C. An even bigger number — more than 21 percent — of individuals earning less than $25,000 reported receiving a payment.

The money can be substantial, particularly for low-income individuals who qualify for the maximum one-time payment of $1,200 (or $2,400 for couples). The payments are tapered for higher-earners and phase out completely for individuals who earn more than $99,000.

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