More than 130,000,000 stimulus payments have been issued but you might be receiving more funds than you anticipated when you receive your upcoming stimulus check.
The IRS has reportedly begun issuing “plus up payments” along with the third round of stimulus checks.
These are supplemental payments that are going out to individuals who previously received partial stimulus payments.
The reason for the increased payment could be something like your income dropping in 2020 compared to 2019 or perhaps because you had a new child or dependent on your 2020 tax return.
Other situations may apply as well.
For example, if the IRS did not previously have your information to issue you a stimulus payment but you recently filed a tax return, you might be in this crowd as well.
So be on the lookout for a potential plus payment if you feel like you have not received the full amount of stimulus funds you are entitled to.
According to CNN, at least six states are trying to protect individuals receiving stimulus checks who might be subject to private debt collection.
Recall that the latest round of stimulus checks are not protected from private debt collectors and Congress failed to protect these recipients from garnishment.
A bill was introduced in the Senate by Democratic Sens. Sherrod Brown of Ohio, Ron Wyden of Oregon and Bob Menendez of New Jersey but Republicans blocked the measure from passing via unanimous consent.
No additional bill has been introduced in the House.
The states that have taken action to ban garnishment include Maryland, New Jersey, Washington, Massachusetts, Nebraska, and New York.
But millions of payments that have already been issued by the IRS remain open and vulnerable to seizure in other states.
This is a very tough situation to be in because even judgments for unpaid medical bills could be used to take stimulus funds. We will see if other states end up taking action.
A new batch of stimulus checks will be issued this week according to the Biden administration.
This round will include paper checks and debit cards for those individuals who did not provide bank information to the IRS or for those people who have been switched from direct deposit to paper checks.
This means that if you are expecting a paper check or debit card do you want to keep a close eye on your mailbox over the next few weeks.
There will also be payment sent via direct deposit on the official payment date of March 24.
Last week, approximately 90 million payments were sent out and the majority of those were delivered via direct deposit.
Every week going forward, additional batches will be sent out according to the US Department of the Treasury, the Internal Revenue Service and the Bureau of the Fiscal Service.
As always, you can check your payment status by going to the IRS Get My Payment tool online.
One of the biggest issues surrounding the third round of stimulus checks is that they will be subject to collection from private debt collectors.
This was a significant departure from the first and second round of checks and is the product of the budget reconciliation process.
That process only allows provisions to pass that directly impact the federal budget and excluding private collections apparently did not meet that threshold.
Still, since the passage of the bill lawmakers have been actively fighting against allowing private debt collectors to collect on stimulus checks.
In fact, they have even proposed an amendment via Ron Wyden (D-Oregon), Sherrod Brown (D-Ohio), Bob Menendez (D-New Jersey), and Chris Van Hollen (D-Maryland) to close the loophole that allows this.
“For many families, the stimulus checks are a lifeline to help pay rent or a mortgage and put food on the table,” Menendez said.
“No predatory debt collector should be able to sweep in and swipe these funds from those who need it most.”
The bad news is that this proposed amendment has been blocked by Pat Toomey (R-Pennsylvania).
“At best this is now a political statement because, as one of my colleagues just alluded to, these payments have already gone out the door,” said Toomey.
“To the extent that a person was subject to garnishment, the garnishment happens automatically. So, it’s already happened.”
This could mean that up to 70 million Americans may see their stimulus checks trimmed down or even completely taken.
This is a shame because last year lawmakers were able to come together to prevent this from happening.
“Last year, Democrats and Republicans joined together to shield previous relief payments, and I would hope that Senate Republicans again support ensuring families receive the $1,400 they need to pay rent and buy groceries,” Wyden stated.
At this point, it is probably too late to implement anything because so many payments have already gone out and garnishments have presumably already taken place.
Officials at the IRS and the Treasury Department both said that they had already started to process the third round of stimulus payments and that they wanted to have the first payments showing up this weekend.
It is estimated that a whopping 85% of Americans will be eligible for the payments.
If you are expecting a payment reportedly the Get My Payment tool is already working for the third round of stimulus checks.
This means that you might be able to check on the status of your payment right here.
If nothing shows up, it’s possible that it still may take some time for your name to appear based on how things have worked the last couple of rounds.
So it might be a good idea to check on it every day or so for the next few days until something appears.
Stimulus checks are already being processed by the IRS and are expected to go out in the next week.
The official payment date for the $1,400 federal stimulus checks is March 17 but because some banks have already started to process the checks, some payments may show up earlier.
The vast majority of payments are being sent out via direct deposit but some people will receive paper checks or even debit cards.
Remember that one huge difference with this third round of checks is that they may be subject to private debt collection.
Unlike the first two rounds that were protected, it doesn’t look like the same protections apply to this round.
Some people have recommended canceling your direct deposit account set up with the IRS if you think you might be subject to private debt collection.
That would likely delay receipt of your payment but you might be able to cash your check at some other institution like WalMart (fees will likely apply) and avoid the garnishment.
It’s possible that activists might still be able to close up this loophole.
However, there is not much time to act and while lawmakers have made statements indicating that they intend to end this loophole, it may not be possible due to payments going out so quickly.
Just remember that this garnishment is only applicable to private collectors and not back taxes, child support, or government debts.
Getting this third round of stimulus checks out has been a bit tricky.
First, there was the initial promise of a $2,000 stimulus check that actually came out to one $600 check + one $1,400 check.
This rubbed many people the wrong way as they thought that politicians were simply trying to earn votes in the highly contested Georgia election runoff by promising a more attractive $2,000 check.
But Congress and the White House did come through to some degree by following up the $600 check with the new $1,400 stimulus payment.
This then led to all of the heated discussions about the targeted nature of the third check.
After some back-and-forth, lawmakers compromised and now it looks like the third checks will go out with lower income cut offs which means that if an individual makes over $80,000 they will not receive a payment.
Due to these changes, roughly 8,000,000 people will likely lose out on eligibility.
But now there is even a new development that could prevent many Americans from receiving the third stimulus check.
Because the third round of checks is coming from a process known as budget reconciliation, they may not be protected from garnishment for unpaid debts.
They should be protected from outstanding tax debt or other debts collected by the government including child support but currently it does not look like they would be protected from collection for private debts.
Some consumer and banking trade groups are pushing for Congress to exempt these payments from garnishment.
“Otherwise, the families that most need this money — those struggling with debt and whose entire bank accounts may be frozen by garnishment orders — will be not be able to access their funds.”
You could imagine that a lot of people who need these checks the most have outstanding private debts that could be garnished so if that remains the case, this could be a huge blow to many people.
Hopefully this gets figured out soon but if the checks are subject to garnishment, some ways to get around them include closing your bank account linked to your IRS direct deposit and/or cashing your paper check at a store like Walmart.
These methods may require delayed receipt of payments and/or force you to pay fees but it would be better than not receiving anything at all.
I’ll be following this issue and updating this article when more information is known.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.