Important Notice for Taxpayers that have or will receive an Economic Impact Payment

Important Notice for Taxpayers that have or will receive an Economic Impact Payment

briefing by Ron Kuyath, CPA

For security reasons, the IRS has been mailing Notice 1444, Your Economic Impact Payment, to all eligible taxpayers within 15 days of making a payment. The notice provides information about the amount of their payment, how the payment was made and how they can follow-up if the indicated payment was not received.

Taxpayers should keep Notice 1444 with all of their other important tax records, including W-2s from employers, 1099s from banks and brokers and any other income and deduction documents. When the IRS computed the Economic Impact Payments they utilized 2018 or, if available, 2019 information. When taxpayers file their 2020 individual income tax return, the information on Notice 1444 will be required to accurately claim additional amounts if they are eligible. For example, a taxpayer may have received a reduced payment because their 2018 adjusted gross income was above the threshold and the maximum amount was reduced due to the phase-out. If the taxpayer’s 2020 adjusted gross income is less than 2018, or 2019 (if available when the IRS processed payment), they should be eligible for the additional amount when they file their 2020 individual income tax return. The phase-out computations were carried to the penny so it will be important for tax preparers to have the information on Notice 1444.  Please note that if 2020 information would reduce the Economic Impact Payment the excess will not have to be repaid.