The first economic impact payments of up to $1,400 to be sent to individuals will be via direct deposits, and paper checks along with prepaid debit cards will start being sent out before the end of March, Treasury and Internal Revenue Service officials told reporters.
The IRS' Check My Payment tool will go online next week to allow people to check on the status of their economic impact payments, the officials said.
In a statement, IRS Commissioner Chuck Rettig said that the agency will be able to deliver most EIPs automatically.
"Even though the tax season is in full swing, IRS employees again worked around the clock to quickly deliver help to millions of Americans struggling to cope with this historic pandemic," Rettig said.
President Joe Biden signed the latest virus relief bill, the American Rescue Plan, on Thursday. The legislation passed the House on Wednesday in a 220-211 vote that accepted several changes made by the Senate.
The American Rescue Plan authorizes the IRS to send $1,400 stimulus payments to individuals with adjusted gross income of $75,000 or less that would be phased out at the $80,000 income level. Couples with adjusted gross income of $150,000 would qualify for the checks, with a phaseout at $160,000.
The law does not allow the stimulus checks to go to nonresident alien individuals, estates or trusts, but it authorizes the $1,400 payments for most dependents claimed on tax returns, not just children under age 17 as was the case with the first two rounds of EIPs.
For this round of payments, the IRS worked with banks to validate taxpayers' account information to streamline the EIP payment process via direct deposit, the officials said. Information sharing among the IRS, Treasury and other governmental agencies such as the Social Security Administration has also increased to make sure qualified individuals receive their EIPs.
The SSA may have information that will help the IRS prevent payments being issued to dead taxpayers, for example, the officials said.
Taxpayers are encouraged to file their 2020 tax returns as soon as possible to help the IRS administer the latest economic impact payments, as the American Rescue Plan permitted the agency to use the latest information it has on file to issue the relief, the officials said.
Once the IRS has 2020 tax information on file, it can issue any supplemental payments that may be required for those who may have lost a job or had their income level changed during the pandemic, without any additional action required by the taxpayer, the officials said.
The agency and department officials did not have details on how many payments were sent totaling how much, but stressed that payments were being sent as soon as possible to get the money circulating into the economy.
In a statement that followed the IRS and Treasury announcement, House Ways and Means Chair Richard Neal, D-Mass., applauded what he called the administration's quick work to start distributing the stimulus payments but urged the tax authorities to delay the current filing season.
"While I am impressed with this phenomenal turnaround, taxpayers will have questions for the IRS about their stimulus payments, on top of questions related to the filing season and other provisions in the American Rescue Plan," Neal said. "As the pandemic continues to impact IRS operations, the end of the filing season must be delayed."
--Additional reporting by Andrew Kragie and Stephen Cooper. Editing by Vincent Sherry.
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