Taxpayers who use the Economic Impact Payment registration tool may fall into a trap where once the taxpayer uses the portal to request the EIP payment, he or she is no longer able to e-file a 2019 return. Many taxpayers may use this portal if they did not file a 2018 return but want to receive their EIP as soon as possible. However, after using the portal, they now need to file a 2019 return because they had income for this year, and they are also eligible to claim the earned income tax credit on their return, which can often be larger than the EIP payment.

Normally, portal users can remedy this by filing a superseding return on paper. The only issue is, the IRS is not currently processing paper returns at this time and has given no clear notice on when they will resume doing so. This may be detrimental to many households. For a single mother of three earning $11,500, she would receive $2,700 in EIP, but would have been eligible for $5,186 in EITC. At the moment she cannot claim the $5,186 as she is in the “filing trap.”

There has been no acknowledgment or proposed solution by the IRS. Taxpayers who encounter this issue will need to wait for the IRS to address the problem. Many IRS campuses are just re-opening and there is no indication as to when a solution will be proposed. Taxpayers can contact their local Low-Income Taxpayer Clinic for updated news.

You can register for our next tax clinic HERE hosted by Riverside County Law Library and presented by Inland Counties Legal Services Inc.

Peter Y. Lin-Tsai, Esq.

Low-Income Taxpayer Clinic Director

Inland Counties Legal Services, Inc.

A Non-Profit 501(c)3 Corporation

1040 Iowa Ave, Suite 109

Riverside, CA 92507

(tel.)888-245-4257 ext.2565

(fax.)951-565-4206

plintsai@icls.org