Economic Impact Payments
You’re Getting a “Stimulus Check”
Economic impact payments are on their way!
Eligible individuals will receive the full $1,200. Eligible couples will receive $2,400.
You most likely do not need to take action to receive these payments, so sit tight.
The IRS will send you a letter 15 days after they send your payment to confirm receipt.
NOTE: The IRS will never call or email you about the economic impact payments. They also are not calling these payments “stimulus checks”. Please be aware that scammers are using this program to try and steal your personal information, including banking information. If you receive a phone call or email asking you to take action to receive your “stimulus check”, “stimulus payment”, or “economic impact payment” disregard it. You can learn more about possible scams from the IRS website.
Since the CARES Act passed at the end of March, one of the most anticipated and most talked about programs to come from it has been the economic impact payments. The questions surrounding this program are varied, and here is what we know right now. Please remember that this information is subject to change as the IRS and Department of the Treasury develop the program and release new guidelines and information.
What Are Economic Impact Payments?
As the CARES Act was being debated in the House and Senate, these payments were generally referred to as “stimulus checks”. The IRS now calls them economic impact payments, and they are an advance on a refundable tax credit that will be applied to your 2020 tax return. And while this is a refund from your future 2020 taxes, the government is using your most recent past filing to estimate how much you will get.
How Much Will I Get?
It depends. The maximum amount you can receive is $1,200 if you filed single and $2,400 if you were married and filed jointly. Those with dependent children can also receive $500 per child that would also qualify for the Child Tax Credit. That means dependent children claimed on your tax return that lived with you six or more months last year and are under 17 years old.
This credit is also limited by your income. So if you filed single and earned under $75,000 in adjusted gross income you will get the full $1,200, plus any qualifying children. If you filed jointly and your adjusted gross income was under $150,000, you’ll get that full $2,400, including any qualifying children, of course.
Anything above those incomes? The rebate steadily decreases. For every $100 you made over those thresholds, it goes down $5. This chart from the Tax Foundation shows the slope of decrease.
What’s super neat about this payment is that, if you qualify, you will definitely get it. Student loan in default? Owe back taxes? Even if your refund is normally withheld to pay some debt, this payment won’t be. It’s not taxable, either!
However, be aware: if you owe child support and it’s in arrears, this payment may be garnished to pay for that.
What Do I Do?
You don’t have to do anything, really. The IRS and the Department of the Treasury are handling this. Payments will be made automatically, based on the information from your most recent tax return. Basically, however you decided to get your last refund, that’s how you’ll get this payment.
If you want to change that information, the IRS says that the Department of the Treasury is working on a portal where you can update your information. It’s also possible that you could file an informational “zero” tax return to get that information into the IRS’s hands. If you want to go this route, talk to a tax professional to make sure you’re doing this correctly.
But if you haven’t needed to file a tax return (you are a senior citizen, on Social Security, or a railroad retiree) don’t worry. The IRS should have your information already, and will use what they find on your Form SSA-1099 or Form RRB-1099 to generate and send you the economic impact payment.
When Will I Get This Payment?
That’s one of the major things we’re not certain of. When the CARES Act was first passed, the IRS indicated that payments would start in the next three weeks.
Don’t expect it quickly, though- the government has millions of people to send this money to, and coordinating all of it will take some time. However, DO be on the lookout for a letter from the IRS. 15 days after they issue the payment, they will send you a letter verifying how they sent the money, and if you didn’t get it, follow the instructions in the letter to report the failure.
FOR MORE INFORMATION
Please check in frequently on the IRS website, as information is being updated regularly: IRS Coronavirus Tax Relief and Economic Impact Payments
PLEASE REMEMBER
Once again, we have to stress- the IRS will NOT call you about this payment. They will NOT email you. They will NOT reach out to you to take any action. Don’t give out your banking information to anyone claiming to be from the IRS, and don’t sign or send over any money! The only action most people will have to take related to this payment is cashing a check. Even more won’t have to take any action at all, as the money will be deposited directly into your bank account.
Be alert for scammers, and hold on tight. This money will be coming and should hopefully provide relief to many of you.