Why is IRS giving out these special payments?
We are administering the new tax law recently signed by President Bush, which provides for these advance payment checks to be sent to taxpayers.

What do I need to do to get this advance payment?
You don't have to do a thing. The payments are automatic. You will receive a letter telling you if you are eligible, how much to expect, and when you will receive the check.

Who gets the advance payment and who doesn't qualify for one?
In general, if you paid taxes for 2000, you may be eligible for this advance payment of the 2001 credit. If you did not pay any income tax for 2000, you are not eligible for the advance payment. Your 2000 return will show if you did not pay income tax. If line 51 on Form 1040 is zero, there was no income tax and you will not receive an advance payment check. Form 1040A filers should look at line 33; 1040EZ filers, line 10.

If you could be claimed as a dependent on another person’s 2000 return, you are also ineligible for an advance payment. Look at Box 6a on Form 1040 or 1040A. If you used Form 1040EZ, look at which box you checked on line 5. If you left Box 6a blank, or you checked “yes” on Form 1040EZ’s line 5, you will not get an advance payment.

If I'm eligible, how much is my advance payment?
The amount of your payment is based on the taxable income shown on your 2000 return. The amount is 5% of your taxable income, up to a maximum of $300 for a single taxpayer, $500 for head of household and $600 for a married couple filing jointly. The payment may be further limited by the fact that it cannot exceed your tax liability after nonrefundable credits. If you did not have a tax liability for 2000 but do have one for 2001, you may be able to claim the tax credit on your 2001 return.

How do I know what my taxable income and tax liability were?
The easiest way to find your 2000 taxable income is to look at Form 1040 line 39, 1040A line 25 , 1040EZ line 6, or line K on the TeleFile Tax Record. The tax liability to be used in figuring the advance payment is on Form 1040 line 51, 1040A line 33, 1040EZ line 10, or line K on the TeleFile Tax Record. If you did not have a tax liability on this line of your 2000 return, you are not eligible for the advance payment.

How do I know if I'm getting an advance payment check?
The IRS will send you a letter in advance of the payment explaining the amount, when to expect your advance payment check and the possibility that the amount will be applied to other debts. These IRS began sending these letters in July and will continue to send them as it processes the tax returns for 2000. You should keep this letter with your other tax records for 2001.

I filed my return by mid-April and I know the IRS received it because my tax payment check was cashed. Why haven’t I gotten a notice about my advance payment?
Some taxpayers who filed their returns by the April deadline and sent a payment with the return may not yet have received a notice about their advance payment check. If you are getting a check, you will receive a notice, but it may not arrive until a week or two before the check does. If you are not eligible for a check, you will receive a notice to that effect after your return is processed.

When the IRS prepared the names in June for the initial notice mailout, it had not finished processing all the returns filed in April. This is because it first processes the payment checks, then the refund returns, and finally the returns that came with the payments. The IRS usually completes this third stage of processing sometime in July.

What is the purpose of these 2001 Advance Payments?
The law is intended to give taxpayers the benefit of a new 10% tax bracket had it been in place for 2001.

When will I get my advance payment check?
Because of the millions of taxpayers involved, it will take about 10 weeks for Treasury's Financial Management Service to finish mailing checks to those taxpayers who have already filed their 2000 tax returns. Financial Management Service is mailing several million checks each week beginning in late July. Checks will be distributed according to the last two digits of the Taxpayer Identification Number (generally, the Social Security number) with the last checks for returns filed this April to be mailed the week of September 24. See the attached distribution schedule.

Is this payment taxable income?
This amount will not be included in income on your Federal tax return. Requirements for your state return may be different.

If I owe back taxes, will I still get the advance payment?
The amount of your advance payment will be applied first to any Federal income tax you owe. If the amount is larger than the debt, you will get a check for the difference. If the full amount is applied to the taxes, you will not receive a check.

If I have an installment agreement with the IRS, will I still get the advance payment?
The advance payment will be applied to the balance due. You should still make your regular, required monthly payment. The advance payment only reduces the total amount you owe; it does not change the terms of your installment agreement.

I don't owe any back taxes but I received a notice that told me I would not be getting a check because my advance payment is being used to pay off a debt I owe. How does that work?
Your payment may be reduced because of an outstanding government debt such as certain past-due child support. If the amount is larger than the debt, you will get a check for the difference. If the full amount is applied to the debt, you will not receive a check.

I haven't filed my 2000 tax return yet. Will I still get this advance payment?
Since the amount is based on the taxable income reported on your return, you won't receive the advance payment until your 2000 tax return is filed. If you have an approved extension to file, you should file by the extended due date in order to receive your advance payment by the end of the year. Treasury will continue to send checks out through the end of December so the sooner you file your return, the sooner you will receive your advance payment.

I filed a 2000 tax return but had no taxable income. Will I still get the advance payment?
To be eligible for this advance payment, there must be taxable income reported on your income tax return. The easiest way to find out your taxable income is to look at Form 1040 line 39, 1040A line 25, 1040EZ line 6, or line K on the TeleFile Tax Record.

I am a college student, with a part-time job, and paid income taxes, but my parents still claim me on their tax return. Do I get the advance payment?
If you can be claimed as a dependent on someone else's return in 2000, you are not eligible for the advance payment.

I paid taxes last year, and I wasn't anyone's dependent – how come I'm not getting an advance payment check?
You may have paid Social Security taxes or self-employment tax, but you must have paid income tax for 2000 to get an advance payment check.

For this information, look at your Form 1040, line 51 – if it's zero, then you did not pay any income tax. For Form 1040A, see line 33; Form 1040EZ, see line 10. Line 57 of Form 1040 or line 35 of Form 1040A are not the correct lines to check – they include other taxes and advance earned income credit amounts.

I had income tax withheld from my pay all year -- why does the IRS say I didn't pay any tax?
You may have had income taxes withheld from your paychecks, but then you got all of that withholding back through a refund.

This would happen if your exemptions and deductions reduced your taxable income to zero, or if certain credits, such as the child tax credit or education credits, reduced your tax to zero. In such cases, you did not pay any income tax and you do not qualify for an advance payment check. But if you had a tax liability before subtracting the Earned Income Tax Credit, you would be able to get a check.

I think my advance payment check is the wrong amount – what can I do?
Your check may have been reduced – even to zero – by taxes you owed or by non-tax federal debts, such as certain child support obligations or student loans. In such a case, you should receive a letter explaining the reduction.

The advance payment amount is based on the information shown on your 2000 tax return or as adjusted by the IRS during processing. The IRS cannot re-figure the amount because of later adjustments or an amended return.

I heard that the advance payments were for $300, but mine is only $100 – is there any way I can get the rest?
The advance payment is based on your 2000 taxes, but your situation may be different this year. If your advance payment – before any reduction for taxes or other debts – is less than the maximum permitted for your filing status, you may be able to claim an additional credit when you file your 2001 tax return. The maximum amounts are $300 for single or married filing separately; $500 for head of household; and $600 for married filing jointly or qualifying widow(er). A worksheet in the tax instructions will help you to figure any credit you qualify for, based on your 2001 tax data.

My spouse and I made more than $12,000 last year -- how come we're not getting a $600 advance payment check?
The advance payment is based on your taxable income, not your gross income. Your taxable income is what's left after you subtract your standard or itemized deductions and your exemption amounts.

For example, a couple with two children would have four exemptions, worth $11,200, and a standard deduction of $7,350, for a total subtraction of $18,550. This couple would need gross income of at least $30,550 to have a taxable income of $12,000 and get the maximum $600 advance payment.

If my spouse and I filed our tax return together, married filing jointly, whose name will be on the check?
The name(s) on the check will be the same as the name(s) on the 2000 tax return.

My spouse died in 2000 and I filed a joint return in my name and my spouse’s name (deceased). The return should result in an advance payment. Will I get just half of the amount because my spouse is deceased?
No, the full amount of any advance payment resulting from a joint return with a decedent will be sent to the other person listed on the return. Half of the payment is yours and the other half belongs to your spouse’s estate. You should handle the estate's portion as you would other estate assets.

I filed a joint return for 2000, the year my spouse died. I am the sole beneficiary of my spouse’s estate. Do I keep the full $600 I am getting as an advance payment or will I have to return $300 because I will be filing as single for 2001?
The law provides that you may keep the advance payment amount you receive based on your 2000 taxes, even if your 2001 tax situation would result in a lesser amount. You do not have to pay back the difference. The same is true for taxpayers whose 2001 income and taxes paid are less than they were in 2000. This might happen to a person who recently retired or became a full-time graduate student.

As an executor, I filed an unmarried decedent’s 2000 tax return. Will I be receiving any advance payment attributable to that return?
Yes, if the return otherwise qualifies for an advance payment. If you either filed the return with an attached Form 1310, “Statement of Person Claiming Refund Due a Deceased Taxpayer,” or filed as a fiduciary for the deceased taxpayer’s estate, the advance payment should be sent directly to you.

Can my advance payment be directly deposited into my bank account?
Unfortunately, direct deposit is not possible because the account information used during the filing season may no longer be accurate. For example, for thousands of taxpayers who obtained refund anticipation loans, the accounts they designated on their returns are generally closed after the loans are paid off.

I moved after I filed my taxes – how will my check will get to me?
If you’ve moved since filing your tax return, you should file a change of address form with the U.S. Postal Service. Unlike some government checks, these can be forwarded to a new address.

Where can I find more information on these advance payments?
If you're getting a payment, the notice from the IRS explains how the amount is figured. General information is also available on the 2001 Advance Payments Information page of this web site. Automated telephone messages are available at 800-829-4477.

How long should I wait for my advance payment before checking on it?
The last checks for those who filed by April will be mailed the week of September 24, 2001. If you have not received a check by Tuesday, October 23, you may call 800-829-1040. We cannot follow-up before that date. For those who filed later, Treasury will continue to send out checks until late December.