Stimulus, Unemployment, and Tax Deadline Updates

Keep up to date with details on excess Premium Tax Credit repayments, unemployment compensation, the new tax deadline, and more.

Updates

June 10, 2021 Update - Child Tax Credit Payments to Begin July 15th

Families who are eligible for advance Child Tax Credit payments will receive a personalized letter with an estimate of their monthly payments. These payments will be distributed by the IRS on July 15, August 13, September 15, October 15, November 15, and December 15 of 2021.

Most families do not need to take any action to get their payment. Normally, the IRS will calculate the payment amount based on the 2020 tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS will instead determine the payment amount using the 2019 return.

Eligible families will begin receiving advance payments, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6 and up to $250 per month for each qualifying child ages 6 to 17.

See IRS.gov/childtaxcredit2021 for more information.

April 13, 2021 Update - Excess Premium Tax Credit Repayment

The American Rescue Plan of 2021 provides relief from needing to repay any excess advance Premium Tax Credit payment amounts that would usually need to be repaid on your 2020 tax return. If you purchased health insurance through the health insurance Marketplace or state exchange and received a larger advance payment of the Premium Tax Credit than would normally have been allowed based on your income, you won't have to pay it back on your 2020 tax return. The software has been updated to include this new legislation.

What if I already filed a tax return repaying an excess advance Premium Tax Credit amount?
The IRS is working on making direct adjustments to taxpayer returns that repaid an advance payment of the Premium Tax Credit. The IRS plans to issue refunds without the need for an amended federal return. See IRS.gov for more information.

March 31, 2021 Update - Ready to File Unemployment Compensation Exclusion:

We're now ready to handle the unemployment compensation exclusion for the federal tax return. However, some states are not yet ready to handle the change. We will provide state-specific information as you work on your state tax return.

March 11, 2021 Update - American Rescue Plan Act of 2021 (ARPA) signed into law:

The president has signed into law the "American Rescue Plan Act of 2021" (ARPA). Among other things, ARPA:


March 10, 2021 Update - Economic Impact Payments (EIP3)

Congress has passed the "American Rescue Plan Act of 2021" (ARPA).

Third Stimulus or EIP3

Eligible recipients will receive a payment of up to $1,400 for individuals or $2,800 for married couples and up to $1,400 for each qualifying dependent. For filers with income above a certain level, the payment amount will be reduced.

This third round of payments is being distributed automatically, with no action required for eligible individuals. Your payment will be determined by information already on file with the IRS.

For more details regarding payments, please visit IRS.gov/EIP

Can I change my direct deposit on your website for EIP3?
The IRS will use the bank deposit information that they already have on file. Due to time constraints, the IRS is not allowing updates to direct deposit. If the bank account information they have is not valid, they will send a paper check or debit card. If you need to file a 2020 return, we recommend that you file a return with your updated bank routing and account information.

We recommend that you go to their website for information at: IRS.gov/EIP

I haven't received a stimulus payment, what can I do?
If you haven't received your first or second stimulus payment (EIP1 and EIP2), you have the option of claiming this on your 2020 tax return as a Recovery Rebate Credit. Our website is configured to prepare this now. Please continue to the Deductions/Credits section and you'll be asked about your stimulus payments on the EIP Information screen. If you missed the third stimulus payment or EIP3, if you qualify, you'll be able to claim this as a credit on your 2021 tax return, which you'll file in 2022.

I used my refund to pay the preparation fees at FreeTaxUSA. Will my third stimulus payment go to your bank?
The IRS will send your EIP or stimulus payment directly to the bank account that you entered to receive your refund. FreeTaxUSA and our banking partner will not be involved in the distribution of your third stimulus payment. See the IRS "Get My Payment" tool for more information: https://www.irs.gov/coronavirus/get-my-payment

Unemployment Compensation

The American Rescue Plan of 2021 allows the first $10,200 of unemployment compensation to not be taxable on 2020 tax returns. The IRS has released guidance on how returns should be filed to correctly exclude that unemployment compensation.

Child Tax Credit

Families who are eligible for advance Child Tax Credit payments will receive a personalized letter with an estimate of their monthly payments. These payments will be distributed by the IRS on July 15, August 13, September 15, October 15, November 15, and December 15 of 2021.

Most families do not need to take any action to get their payment. Normally, the IRS will calculate the payment amount based on the 2020 tax return. If that return is not available, either because it has not yet been filed or it has not yet been processed, the IRS will instead determine the payment amount using the 2019 return.

Eligible families will begin receiving advance payments, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6 and up to $250 per month for each qualifying child ages 6 to 17.

See IRS.gov/childtaxcredit2021 for more information.

Excess Premium Tax Credit Repayment

The American Rescue Plan of 2021 provides relief from needing to repay any excess advance Premium Tax Credit payment amounts that would usually need to be repaid on your 2020 tax return. If you purchased health insurance through the health insurance Marketplace or state exchange and received a larger advance payment of the Premium Tax Credit than would normally have been allowed based on your income, you won't have to pay it back on your 2020 tax return. The software has been updated to include this new legislation.

What if I already filed a tax return repaying an excess advance Premium Tax Credit amount?
The IRS is working on making direct adjustments to taxpayer returns that repaid an advance payment of the Premium Tax Credit. The IRS plans to issue refunds without the need for an amended federal return. See IRS.gov for more information.

Get started on your 2021 tax refund