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IRS: Tax return filing procedures for individuals who are eligible for the economic impact payment

The IRS issued "Revenue Procedure 2020-18" which provides two tax return filing procedures for certain taxpayers who are affected by the ongoing Coronavirus pandemic and eligible for economic impact payment relief. Quoting from Notice 2020-18:

The first procedure is a simplified procedure for eligible individuals who voluntarily wish to file a Federal income tax return only to receive allowed economic impact payments. These eligible individuals are encouraged to use the “Non-Filers: Enter Payment Info Here” tool, available at www.irs.gov/coronavirus, to submit information to the Internal Revenue Service (IRS) to receive their allowed economic impact payment much more quickly than if they filed a paper return. The second procedure accommodates zero AGI electronic filers who utilize tax return preparation software or otherwise need to provide more detail in filing State or local tax returns than that allowed by the simplified procedure. 

Federal income tax returns filed in accordance with these procedures should be filed as soon as possible but not later than October 15, 2020, to ensure that the IRS will have sufficient time to process all returns and make all resulting economic impact payments before December 31, 2020, as required by the CARES Act. The “Get My Payment” tool provides the most up-to-date information regarding the status of an eligible individual’s economic impact payment. 

Part III

Administrative, Procedural, and Miscellaneous

26 CFR 1.6012-1:  Individuals required to make returns of income. (Also:  Part 1, §1.6017-1)

Rev. Proc. 2020-28

SECTION 1. PURPOSE

     .01 This revenue procedure provides procedures for eligible individuals who are not otherwise required to file Federal income tax returns for taxable year 2019 to receive economic impact payments under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281 (March 27, 2020).

     .02 Eligible individuals who voluntarily wish to file a Federal income tax return only to receive allowed economic impact payments can use the simplified return filing procedure set forth in section 3 of this revenue procedure to file their Federal income tax return for taxable year 2019 and will receive their allowed economic impact payment after following the simplified filing procedure.   These eligible individuals are encouraged to use the “Non-Filers: Enter Payment Info Here” tool, available at www.irs.gov/coronavirus, to submit information to the Internal Revenue Service (IRS) to receive their allowed economic impact payment much more quickly than if they filed a paper return.  To ensure that allowed economic impact payments are made to the maximum number of eligible individuals, such eligible individuals who do not wish to use the “Non-Filers: Enter Payment Info Here” tool can alternatively file their return for taxable year 2019 using alternative tax return preparation software or paper returns that follow the simplified return filing procedure in section 3 of this revenue procedure.

     .03 The Department of the Treasury (Treasury Department) and the IRS are aware that individuals otherwise not required by law to file Federal income tax returns may prepare income tax returns for State or local governments (for purposes such as establishing qualification for State or local government benefits) using tax return preparation software that can concurrently prepare both Federal and State or local tax returns.  The IRS is also aware that individuals having an adjusted gross income (AGI) of zero (as opposed to AGI of $1 or more) are not able to file Federal income tax returns electronically to receive allowed economic impact payments due to tax return preparation software and return processing parameters.  Section 4 of this revenue procedure provides a special procedure for eligible individuals with zero AGI who voluntarily wish to file a complete Federal income tax return electronically for taxable year 2019 to receive allowed economic impact payments.  The special procedure in section 4 of this revenue procedure does not apply to a return filed on paper, which should be filed in accordance with the applicable instructions.

   .04 An eligible individual who has already filed a Federal income tax return for taxable year 2019 will not need to file any additional forms or otherwise contact the IRS to receive their economic impact payment automatically.  See § 6428(f)(1) and (3).  An eligible individual who filed a Federal income tax return for 2018 will also not need to file any additional forms or otherwise contact the IRS to receive their allowed economic impact payment automatically, unless the individual had a change in circumstances in 2019 that would increase the amount of their economic impact payment or a change of address or direct deposit information.  See § 6428(f)(5).  Likewise, a social security, railroad retirement, or other Federal beneficiary to whom an automatic economic impact payment may be made—who is not otherwise required to file a Federal income tax return for taxable years 2018 and 2019, who does not have any qualifying children, and whose spouse, if any, also received these benefits—will not need to file any additional forms or otherwise contact the IRS to receive their allowed economic impact payment automatically.  See, for example, Treasury Department Press Release, “Social Security Recipients Will Automatically Receive Economic Impact Payments,” dated April 1, 2020, available at https://home.treasury.gov/news/press-releases/sm967.

SECTION 2. BACKGROUND

     .01 Section 2201(a) of the CARES Act added § 6428 to the Internal Revenue Code (Code).   Section 6428(a) provides an eligible individual a refundable tax credit against the individual’s Federal income tax liability (as imposed by subtitle A of the Code) for the first taxable year beginning in 2020.  In general, the amount of that credit equals the sum of (1) $1,200 ($2,400 in the case of two eligible individuals filing a joint return), plus (2) an amount equal to the product of $500 multiplied by the number of qualifying children (within the meaning of § 24(c) of the Code) of the eligible individual.  But see § 6428(c) (providing graduated reductions of the total credit amount based on the eligible individual’s AGI).

     .02 Section 6428(d) defines the term “eligible individual” for purposes of § 6428 to mean any individual other than (1) a nonresident alien individual, (2) an individual who can be claimed as a dependent for a deduction under § 151 of the Code for the taxable year, or (3) an estate or trust.  Section 6428(g) provides that an eligible individual must have a social security number (SSN) that is valid for employment (or have filed a joint return with an individual who has an SSN that is valid for employment if one of the joint return filers is a member of the Armed Forces of the United States at any time during the taxable year) to qualify for the credit.   For the purpose of determining the credit amount under § 6428(a), a child must be under the age of 17 and have an SSN that is valid for employment or an adoption taxpayer identification number (ATIN).

     .03 Section 6428(f) addresses the payment of advanced refunds and credits (that is, economic impact payments) during calendar year 2020.  In general, § 6428(f)(1) provides that each individual who was an eligible individual for taxable year 2019 is treated as having made a payment against the Federal income tax for taxable year 2019 in an amount equal to the economic impact payment amount.  Section 6428(f)(2) provides that this economic impact payment amount is the amount that would have been allowed as a credit under § 6428 for taxable year 2019 if § 6428 (other than subsections (e) and (f) of § 6428) had applied to taxable year 2019.

     .04 Section 6428(f)(5) permits the Secretary of the Treasury or his delegate (Secretary) to provide economic impact payments to eligible individuals who have not filed a Federal income tax return for taxable year 2019.   Specifically, § 6428(f)(5)(A) provides that, if an eligible individual has not filed a Federal income tax return for taxable year 2019, the Secretary may determine the amount of the economic impact payment based on information reported on the eligible individual’s Federal income tax return filed for taxable year 2018.  If that eligible individual has not filed such a return for taxable year 2018, § 6428(f)(5)(B) provides that the Secretary may use information with respect to that eligible individual for calendar year 2019 provided in (1) Form SSA-1099, Social Security Benefit Statement, or (2) Form RRB-1099, Social Security Equivalent Benefit Statement.

     .05 Section 6428(h) requires the Secretary to prescribe such guidance as may be necessary to carry out the purposes of § 6428, which include the purpose set forth in § 6428(f)(3)(A) of providing economic impact payments “as rapidly as possible.”

     .06 Because the IRS has not received the returns or forms described in § 6428(f)(1) and (5) for eligible individuals described in section 3.02 or 4.02 of this revenue procedure, the IRS currently lacks necessary information to make the allowed economic impact payments in calendar year 2020 to such eligible individuals.  Accordingly, pursuant to § 6428(h)—

        (1) Section 3 of this revenue procedure provides a simplified Federal income tax return filing procedure for eligible individuals who are not required to file a Federal income tax return for taxable year 2019; and 

        (2) Section 4 of this revenue procedure provides a special procedure for eligible individuals who are not required to file a Federal income tax return for taxable year 2019 and have zero AGI for that taxable year to file a complete Federal income tax return electronically.

      .07 The procedure described in section 4 accommodates zero AGI filers (as defined in section 4.02 of this revenue procedure) who (i) need to provide more detail in filing State or local tax returns than that allowed by the simplified procedure provided by section 3, or (ii) utilize tax return preparation software that does not permit filing under the simplified procedure provided by section 3. Otherwise, taxpayers should use the simplified procedure described in section 3.

      .08 Eligible individuals described in section 3.02 or 4.02 of this revenue procedure will receive an economic impact payment after following the Federal income tax return filing procedures provided in sections 3 or 4 of this revenue procedure, as applicable.  The economic impact payment will be offset for past-due child support under § 6402(c) of the Code. 

SECTION 3. SIMPLIFIED PROCEDURE FOR FILING PAPER OR ELECTRONIC TAX RETURN IF ELIGIBLE INDIVIDUAL IS NOT REQUIRED TO FILE A FEDERAL INCOME TAX RETURN FOR TAXABLE YEAR 2019

     .01 Federal income tax return filed by mail or electronically.  A simplified return filer (as defined in section 3.02 of this revenue procedure) will receive an economic impact payment if the simplified return filer files a Federal income tax return on Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, for taxable year 2019, on paper or electronically, pursuant to the simplified procedure set forth in this section 3.  

     .02 Definition of simplified return filer.  For purposes of this section 3, a “simplified return filer” is an eligible individual described in section 2.02 of this revenue procedure who is not required to file a Federal income tax return for taxable year 2019 and has not filed a Federal income tax return for that taxable year.  In addition, a simplified return filer must have an SSN that is valid for employment or file a joint return with an individual who has an SSN that is valid for employment if one of the joint return filers is a member of the Armed Forces of the United States at any time during taxable year 2019.

     .03 Filing deadline.  As soon as possible but not later than October 15, 2020, a simplified return filer following the procedure set forth in this section 3 must file a Federal income tax return.  This filing deadline ensures that the IRS will have sufficient time to process all Federal income tax returns filed under section 3 of this revenue procedure and make all resulting economic impact payments before December 31, 2020, the last day economic impact payments may be made under § 6428(f)(3)(A). Simplified return filers are encouraged to file their tax returns electronically to speed the issuance of their economic impact payments.

     .04 Simplified filing method.

        (1) Overview.  In the case of a simplified return filer, the IRS will process the simplified return filer’s Form 1040 or Form 1040-SR for taxable year 2019 to provide an economic impact payment, if the form is prepared in the manner required in this section 3.04.  The Form 1040 or Form 1040-SR should include only the information described in this section 3.04.

        (2) Write “EIP2020” on form.  A simplified return filer must designate “EIP2020” on Form 1040 or Form 1040-SR.

           (a) If filing the Federal income tax return by mail, this text must be placed above the printed material at the top of page 1 of the Form 1040 or Form 1040-SR.

           (b) If electronically filing the Federal income tax return, this text must be placed in the correct spot of the electronic filing record.

        (3) Filing status.  A simplified return filer must select their filing status as of the end of taxable year 2019 at the top of Form 1040 or Form 1040‑SR.

        (4) Required general information.  A simplified return filer must enter their name, mailing address, and SSN, and the name and SSN of their spouse if filing a joint return, on the appropriate lines of Form 1040 or Form 1040-SR.  If a simplified return filer and their spouse file a joint return and either the simplified return filer or the spouse is a member of the Armed Forces of the United States at any time during taxable year 2019, then an SSN for one spouse and either an SSN or an IRS individual taxpayer identification number (that is, an ITIN) for the other spouse must be entered on the appropriate lines of Form 1040 or Form 1040-SR.

        (5) Individuals who could be claimed as dependents by other taxpayers.  A simplified return filer must check all applicable boxes under the address lines for each individual who could be claimed as a dependent by any other taxpayer for taxable year 2019.

        (6) General information regarding dependents.  If applicable, a simplified return filer should provide information regarding each dependent who was under the age of 17 at the end of taxable year 2019 on the appropriate lines of Form 1040 or Form 1040‑SR.   For each dependent, a simplified return filer must provide the name, SSN or ATIN, and relationship to the individual.   Column (4) of each line on the form must be left blank.

        (7) Limited information to provide in lines 1 through 24.  Except as provided in this section 3.04(7), a simplified return filer should leave blank lines 1 through 24 of Form 1040 or Form 1040-SR, even if the values for these lines are in fact not zero.

           (a) Lines 2b, 7b, and 8b.  A simplified return filer who files their Federal income tax return electronically must enter $1.00 on lines 2b, 7b, and 8b.

           (b) Line 9.  A simplified return filer who files their Federal income tax return electronically must enter the applicable standard deduction amount for their filing status on line 9.

           (c) Line 11b.  A simplified return filer must enter $0.00 on line 11b.

           (d) Line 21a.  A simplified return filer must not check the box on line 21a because the economic impact payment may not be divided among multiple accounts.

           (e) Lines 21b through 21d.  A simplified return filer may request the direct deposit of their economic impact payment into their account at a bank or other financial institution by entering their direct deposit information on lines 21b through 21d.  A simplified return filer must not request their economic impact payment to be deposited into an account that is not in the name of that simplified return filer (for example, a simplified return filer must not request a direct deposit of their economic impact payment into their tax return preparer’s account).

     05. Signature.  A simplified return filer must provide their identity protection personal identification number (that is, their IP PIN), if applicable, and sign the return under penalties of perjury.  In addition, a simplified return filer may enter their identifying information of any third-party designee, if applicable, at the bottom of page 2 of Form 1040 or Form 1040-SR.   A simplified return filer who has been assigned an IP PIN, but has misplaced it, may retrieve the IP PIN at https://www.irs.gov/identity-theft-fraud-scams/retrieve-your-ip-pin.

     .06 Computation of economic impact payment.  Based on the information provided by a simplified return filer on Form 1040 or Form 1040-SR for taxable year 2019, the IRS will compute the amount of the economic impact payment that will be paid to the simplified return filer in calendar year 2020.

     .07 Accuracy of return.  The IRS will not challenge the accuracy of the items of income reported on a Federal income tax return filed by a simplified return filer in accordance with this section 3.

SECTION 4. SPECIAL PROCEDURE FOR FILING ELECTRONIC TAX RETURN IF ELIGIBLE INDIVIDUAL HAS NO TAXABLE YEAR 2019 ADJUSTED GROSS INCOME

     .01 Federal income tax return filed electronically.  A zero AGI filer (as defined in section 4.02 of this revenue procedure) will receive an economic impact payment if the zero AGI filer electronically files a Federal income tax return on Form 1040 or Form 1040-SR for taxable year 2019 pursuant to the requirements set forth in sections 4.03 through 4.06 of this revenue procedure.  The special procedure set forth in this section 4 applies only to an electronically filed return and does not apply to a return filed on paper.   

     .02 Definition of zero AGI filer.  For purposes of this section 4, a “zero AGI filer” is an eligible individual described in section 2.02 of this revenue procedure who has zero AGI for taxable year 2019 (that is, the eligible individual has zero AGI for taxable year 2019 reportable on line 8b of Form 1040 or Form 1040-SR) and has not yet filed a Federal income tax return for taxable year 2019.  In addition, a zero AGI filer must have an SSN that is valid for employment or file a joint return with an individual who has an SSN that is valid for employment if one of the joint return filers is a member of the Armed Forces of the United States at any time during taxable year 2019.

     .03 Filing deadline.  As soon as possible but not later than October 15, 2020, a zero AGI filer must electronically file their Federal income tax return under the procedure set forth in this section 4.  This filing deadline ensures that the IRS will have sufficient time to process all Federal income tax returns filed under section 4 of this revenue procedure and make all resulting economic impact payments before December 31, 2020, the last day economic impact payments may be made under § 6428(f)(3)(A).

     .04 Required information.  In addition to all other information required to be entered on Form 1040 or Form 1040-SR, a zero AGI filer must enter the following:

        (1) $1.00 as taxable interest on line 2b of the form;

        (2) $1.00 as total income on line 7b of the form; and

        (3) $1.00 as AGI on line 8b of the form.

     .05 Signature.  A zero AGI filer must provide their identity protection personal identification number (that is, their IP PIN), if applicable, and sign the return under penalties of perjury.  In addition, a zero AGI filer may enter the identifying information of any third-party designee, if applicable, at the bottom of page 2 of Form 1040 or Form 1040-SR.  A zero AGI filer who has been assigned an IP PIN, but has misplaced it, may retrieve the IP PIN at https://www.irs.gov/identity-theft-fraud-scams/retrieve-your-ip-pin

     .06 Computation of economic impact payment.  Based on the information provided by the zero AGI filer on Form 1040 or Form 1040-SR for taxable year 2019, the IRS will compute the amount of the economic impact payment that will be paid to the zero AGI filer in calendar year 2020.

     .07 Accuracy of return.  The IRS will not challenge the accuracy of the items of income reported on a Federal income tax return filed by a zero AGI filer for taxable year 2019 in accordance with this section 4.

SECTION 5. “GET MY PAYMENT” AND “NON-FILERS: ENTER PAYMENT INFO HERE” TOOLS

     Visit www.irs.gov/coronavirus for additional details about economic impact payments.  The “Get My Payment” tool provides the most up-to-date information regarding the status of an eligible individual’s economic impact payment.   The “Non-Filers: Enter Payment Info Here” tool permits simplified return filers to submit information to the IRS pursuant to the simplified procedure set forth in section 3 of this revenue procedure.

SECTION 6. DRAFTING INFORMATION

     The principal author of this revenue procedure is the Office of Associate Chief Counsel (Procedure and Administration).