The distribution of the third round of direct federal stimulus payments continues, with the IRS announcing last week that it had begun the process of sending out another batch of payments. The latest batch included over 2.3 million additional payments, worth a total of more than $4.2 billion. As a result of the new batch, the IRS has now distributed 169 million payments to eligible Americans, totaling roughly $395 billion. The IRS has now used up the majority of the $410 billion made available to it for use in the third round of federal stimulus payments by the American Rescue Plan and is likely now approaching the end of its campaign to distribute the payments.

With the approaching end of the IRS’ distribution of the payments, it is likely that most Americans who are eligible for them have now received their third-round stimulus payment. But for many Americans – including those who are still waiting for their payments – the wait to receive their stimulus payments was a long one.

The wait for some Americans was particularly long because the IRS in its initial batches of third-round stimulus payments focused primarily on sending payments to those people about whom the agency had information readily available. (The third round payments, which were the largest batches so far, with the first, second, and fourth batches including roughly 90 million, 37 million, and 25 million payments, respectively.) This helped the IRS get large numbers of payments out quickly but also meant that many Americans were left waiting.

Those left waiting largely fell into one of two groups, both of which experienced delays in receiving their full payments as a result of their eligibility being tied to the processing of their 2020 tax returns. This includes those people about whom the IRS did not have sufficient information, and who as a result could not receive stimulus payments until they submitted and had their 2020 tax returns processed by the IRS.

The other group of Americans who have had to endure a longer wait than others consists of those who may have received some form of initial payment that fell below the total they were eligible for. When initially determining eligibility for payments of up to $1,400, the IRS based its determinations on 2019 tax returns, which at the time represented the most recent data available to it. As 2020 returns began coming in, however, the IRS then started to send out what it refers to as “plus-up” payments – supplemental payments made to those people whose 2020 returns indicated a loss of income or a change in dependent status that entitled them to a larger payment.

The most recent batch of stimulus payments included a large number of both plus-up payments as well as payments made to people who previously did not have information on file with the IRS, and the agency has confirmed that payments moving forward will be focused on these categories of recipients. 

Eli Fuhrman is a contributing writer for The National Interest.

Image: Reuters