A reader asked about the ever-changing 2020 tax year. Below we address some common questions.
Q: "We filed last year, and the IRS cashed our check when we owed money," wrote the reader.
"Now we have not received the last two stimulus payments because they state there is no record of our taxes being filed — yet they cashed the check. We are eligible for both stimulus payments. The IRS says you can't make an appointment at a local office. Do we have no recourse other than to re-file the 2020 return?"
A: The IRS admits it's behind. The IRS commissioner testified to the House Ways and Means Committee about the backlog. "What your reader is describing is a common issue that we've seen in our office and that has been discussed a lot," said Drucker & Scaccetti accounting firm shareholder Rosalind Sutch.
If the check was cashed, on the back of the check, the IRS should track that amount. You may have to refile 2019 returns, sending certified mail, return receipt, but the agency is already backed up.
If the IRS cashed the check, you shouldn't be penalized because the government has the funds.
"Our best advice is that taxpayer electronically file 2020 returns with direct deposit information whenever possible — it will expedite the processing," Sutch said.
Separately, even if the IRS claims it hasn't received your 2019 tax filing, you can still claim the stimulus money you are owed as a credit on 2020 taxes.
"When you are filing your 2020 taxes, those payments are counted as advanced rebate recovery payments. Claim those credits on your 2020 return. The first round totaled $1,200 and second round $600. So you would get a $1,800 rebate on taxes" if you didn't get either check — and were eligible — said Mitch Gerstein, an accountant with Isdaner & Co. in Bala Cynwyd, Pa.
What about the third round of $1,400? Again, "if you don't receive that money, you're entitled to a credit in 2021."