Everything You Need to Know About the Economic Impact Payments Under the CARES ACT
With the spread of the Coronavirus, also known as COVID-19, the US Government passed the CARES ACT, part of which includes stimulus payments to many taxpayers. What does this mean for you and your family? In this article, we've outlined some of the most frequently asked questions.
Everything You Need to Know About the Stimulus Payments Under the CARES ACT
With the spread of the Coronavirus, also known as COVID-19, the US Government passed the CARES ACT, part of which includes economic income payments for the country's populace. But what does that mean for you and your family? Below, we've outlined some of the most frequently asked questions:
Who is eligible for the economic impact payment?
Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will get the full amount of $1,200. Married couples with no children earning $150,000 or less will receive a total of $2,400. Taxpayers filing as head of household will get the full payment of $1,200 if they earned $112,500 or less. An additional $500 is provided for each qualifying dependent.
Above those income figures, the payment decreases until it stops altogether for single filers earning $99,000 or married people who have no children and earn $198,000. According to the Senate Finance Committee, a family with two children will no longer be eligible for any payments if its income surpassed $218,000.
You can’t get a payment if someone claims you as a dependent, even if you’re an adult. In any given family and in most instances, everyone must have a valid Social Security number in order to be eligible. There is an exception for members of the military.
How will the IRS know where to send my payment?
For those who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The stimulus payment will be deposited directly into the same account used to accept a refund or electronically send a payment.
What if the IRS doesn't have my direct deposit information?
There's currently a plan to develop a web-based portal for individuals to provide their banking information to the IRS online, so that they can receive payments immediately as opposed to checks in the mail. Otherwise, a check will be mailed to the last known address.
I am not typically required to file a tax return. Can I still receive my payment?
Yes! The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate payments to those who are not required to file a tax return, and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return. TurboTax has partnered with the IRS to collect direct deposit information from low income wage earners who are typically not required to to file a tax return.
Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.
I was supposed to, but have not filed my tax return for 2018 or 2019. Can I still receive a stimulus payment?
Yes. The IRS urges anyone who has not yet filed a tax return for 2018 or 2019 (but has an obligation to do so) to file as soon as they can to receive a payment. Make sure to include direct deposit banking information on the return to receive your payment quicker. For those concerned about getting help with a tax return, these stimulus payments will be available throughout the rest of 2020.
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Posted with permission from HomeWork Solutions (www.homeworksolutions.com)