Filing strategy for new $1400 round of stimulus

[Snaggletooth]

I have a client who qualified for stimulus money in 2019 but who will not qualify in 2020.

1. Is it a good idea to not file 2020 until the money pours in (in the next week or so). They won't have to pay it back.
2. Do people have to file a 2020 return before they can get the $1400?

[Lion]

Explain the options to your client and let him/her decide.

[Gene V]

Probably best to not file 2020 in your case.

Issue Number: IR-2021-54
The third round of Economic Impact Payments (EIP3) will be based on the taxpayer’s latest processed tax return from either 2020 or 2019. This includes anyone who successfully registered online at IRS.gov using the agency’s Non-Filers tool last year, or alternatively, submitted a special simplified tax return to the IRS. If the IRS has received and processed a taxpayer’s 2020 return, the agency will instead make the calculation based on that return.

[ATSMAN]

Explain the options to your client and let him/her decide.

Correct. Don't get yourself in the middle by making a recommendation and then it blows up for any given reason. I have a MFJ couple fighting right now. His income in 2020 was actually higher because he is a truck driver and last year (2020) he put a lot of overtime. The couples 2019 income was lower than 160K so they will get the third stimulus based on that BUT she really does not care about the stimulus money because she is leaving him with 3 kids and wants to file ASAP and be done with him. MFS option does not pan out that well.

[Twin Turbo Z]

Deja Vu anyone ?

[Burke]

Opposite scenario. 2020 income is less than 2019. TP got full amt last year due to EIP based on 2018 return. Jan payment based on 2019 return and was partial. Balance will be accounted for on 2020 return. But NEW EIP just passed will be based on 2019, as 2020 not filed yet! Will last EIP be adjusted on 2021 return?? Or will balance due be sent after 2020 is filed?

[Rapid Robert]

But NEW EIP just passed will be based on 2019, as 2020 not filed yet! Will last EIP be adjusted on 2021 return?? Or will balance due be sent after 2020 is filed?

The latter one, I believe. There is some language in there about additional payment after the 2020 return is filed, I don't have all the details handy.

And yes, the EIP3 is just an advance on the 2021 RRC.