Missing stimulus check money? How to claim the payment on your 2020 tax return

The Internal Revenue Service is essentially done sending stimulus checks for now, but if you didn't receive your fully promised payment, don't worry — there's a quick fix.

Americans who have not received their coronavirus stimulus check payments, or who received the incorrect amount, can claim the missing money when they file their 2020 tax return.

The CARES Act, passed in March, provided cash payments of up to $1,200 for adults ($2,400 for couples filing jointly) and $500 per child under 17. And the $900 billion coronavirus relief package, approved at the end of December, authorized additional payments of up to $600 per adult ($1,200 for couples) and up to $600 for each qualifying child under 17.

The first check was based on either your 2018 or 2019 tax return, while the second check was based on your 2019 return. But in some instances, Americans either didn't receive the stimulus check, or didn't receive the full amount they were entitled to, given instances like job losses or the birth of a child.

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Millions of Americans joined the unemployment rank, or saw their income reduced, this year as a result of the pandemic -- meaning that many individuals who didn't initially receive the money based on their 2018 or 2019 tax returns may now qualify. Adult dependents who are no longer dependents, like college students who were claimed as dependents on their parents' return in 2019, but are filing independently in 2020, may also be eligible for the payment.

If you think the IRS owes you stimulus money, you can use a recovery rebate worksheet to calculate how much you should receive and claim that amount on Line 30 of Form 1040 and Form 1040-SR. The IRS will include your stimulus payments as part of your refund check. Even if you don't earn enough money to typically file a return, you will need to submit one this year to receive your allotted payment.

The IRS opened Free File, free online tax preparation software, in January for taxpayers who earn less than $72,000 to prepare and file their income tax returns, although they will not begin processing returns until Feb 12.

“For 2021, eligible taxpayers who did not receive the full amount can claim it as the Recovery Rebate Credit when they file their 2020 tax return,” the IRS said. “Use IRS Free File to file and claim this important benefit.”

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The fastest way to receive your money is to file your taxes electronically as the IRS deals with a backlog of nearly 7 million unprocessed paper returns from last year. The agency said it expects nine out of 10 taxpayers to receive their refund within 21 days of filing electronically.

But some individuals may not get the full $600 payment if they owe back taxes, despite a promise by the IRS that it won't seize the economic impact payments to offset any government debts.

The issue is that the cash payments are actually an advance tax credit (the Recovery Rebate Credit) on 2020 tax returns, approved to be paid in two advance payments in 2020 and at the beginning of 2021. When you claim that credit on your 2020 return once tax season begins on Feb. 12, the IRS will factor it into your overall tax return, including liabilities.

That means, for instance, if you received a credit for a $600 stimulus check, but owe $500, you will receive a payment of $100.

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"It is a tax credit against your 2020 income tax," the IRS said. "Generally, this credit will increase the amount of your tax refund or decrease the amount of the tax you owe."