If you have an IRS installment agreement, you may be wondering if you qualify for a stimulus check. The answer is yes, but there are some important details to consider.
First, let`s define what an IRS installment agreement is. It is a payment plan that you can set up with the IRS if you owe taxes but cannot pay the full amount at once. With an installment agreement, you can make monthly payments until you have paid off your tax debt.
Now, onto the stimulus checks. The most recent stimulus package, passed in December 2020, includes a third round of direct payments to eligible individuals and families. These payments are also referred to as Economic Impact Payments (EIP).
If you have an IRS installment agreement, you should still be eligible for the third round of stimulus checks. However, there are a few things to keep in mind.
First, if you owe back child support, your stimulus check may be reduced or even withheld entirely. This is because the December 2020 stimulus package included a provision that allows the IRS to garnish stimulus payments to pay past-due child support.
Second, if you are still making payments on your installment agreement, the IRS may use your stimulus payment to offset your tax debt. This means that your stimulus payment may not be sent to you, but will instead be applied to your outstanding tax bill.
Finally, it is important to note that stimulus payments are based on your most recent tax return. If you have not filed your 2020 tax return yet, the IRS will use your 2019 tax return to determine your eligibility and payment amount. If you have a balance due on your 2019 tax return, the IRS may apply your stimulus payment to that balance before sending the remainder to you.
In summary, having an IRS installment agreement should not disqualify you from receiving a stimulus check. However, if you owe back child support or have a balance due on your installment agreement, your stimulus payment may be reduced or offset. If you have any questions or concerns about your eligibility for a stimulus payment, it is recommended that you consult with a tax professional or reach out to the IRS directly.