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Monday April 19, 2021

Washington News

Washington Hotline

Economic Impact Payments for Individuals Experiencing Homelessness

In IR–2021–87, the Internal Revenue Service (IRS) urged advisers and organizations to help people experiencing homelessness benefit from Economic Impact Payments (EIPs).

Many individuals experiencing homelessness do not have a permanent address or a bank account. However, they still may qualify for a $1,400 Economic Impact Payment. The IRS is attempting to get information to individuals who are experiencing homelessness, the rural poor and other historically under-served groups. Community groups, employers and staff of homeless shelters are urged to help individuals learn about EIPs.

IRS Commissioner Chuck Rettig stated, "The IRS has been continuing to work directly with groups inside and outside the tax community to get information directly to people experiencing homelessness and other groups to help them receive Economic Impact Payments. The IRS is working hard on this effort, enabling millions of people who do not normally file a tax return to receive these payments. But we need to do more, and we appreciate all the help we've been receiving from national and local groups to assist in this effort to reach the people who desperately need this help."

Commissioner Rettig reminds employers and advisors that Economic Impact Payments are available even if an individual has little or no income and does not file a tax return. An EIP is available if the individual has a Social Security number and is not a dependent on another tax return.

Individuals do not need a permanent address or a bank account and qualify to receive an EIP even if they are not employed. Although they may not have filed a tax return in many years, they can file a basic 2020 tax return. On this return, they can claim a Recovery Rebate Credit. The third round of payments is $1,400 for an individual and an additional $1,400 for each dependent.

Individuals experiencing homelessness may use the address of a friend, relative or shelter. If they do not have a bank account, the IRS will send a check or debit card for the EIP.

Some financial institutions permit individuals to open a low or no-cost bank account. The website of the Federal Deposit Insurance Corporation has information in both English and Spanish that will assist individuals in locating an institution.

The IRS makes it easy to file a 2020 tax return for the Recovery Rebate Credit. Go to IRS.gov and use the Free File program. This is available through a web browser on a smartphone or a computer. Individuals who are employed may also qualify for the Earned Income Tax Credit (EITC).

There is also assistance available through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs. These programs will assist tens of thousands of individuals during this tax season.

The EITC is available to a number of individuals experiencing homelessness who are employed. Single persons with an income at or below $15,820 in 2020 qualify. Couples with three or more children qualify if their income is less than $56,844. The maximum EITC for a family is $6,660 and it is a refundable credit.

The IRS also announced that another two million payments worth $3.4 billion have been released. The 159 million stimulus payments to individuals now totals $376 billion. The most recent payments were sent to Veterans Affairs beneficiaries and Social Security recipients who did not use the Non-Filer's tool.

Published April 16, 2021
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