COVID-19 continues to impact the United States, the federal government is taking action to ease the burden on taxpayers. Most recently, the Senate passed a massive stimulus package (the House has yet to vote but is expected to follow suit). A key feature of the stimulus is individual checks.
As with anything tax-related, there’s a little bit of confusion. To help you sort it out, here are a few questions and answers:
When will I get my check?
Checks are supposed to be produced “as rapidly as possible,” but it’s been suggested that could take up to two months. If you use direct deposit, it will be faster.
Updated: 04/10/2020 For details please visit https://www.appliedtaxservices.com/2020/04/10/when-youll-get-your-stimulus-check/
How big will my check be?
Checks will be $1,200 per adult – or $2,400 for married couples filing jointly – and an additional $500 per child.
Are there income limits on checks?
The amount of the checks would start to phaseout for those earning more than $75,000 ($150,000 for joint returns and $112,500 for heads of household). This is adjusted gross income (AGI), not taxable income – so before your standard or itemized deductions. You’ll see your number on line 8(b) of your form 1040:
How does a phaseout work?
Phaseout means that the benefit goes down as income goes up. In this case, for every $100 of income above those thresholds, your check will drop by $5. So, if you are a single filer earning $75,100, your check will be $1,195 ($1,200-$5). If you are a single filer earning $85,000, your check will be $700 ($1,200-$500). If you do the quick math on that, it means that you’ll phaseout completely (meaning that you’ll get nothing) once you hit $99,000 as a single filer, $198,000 as a married couple filing jointly, or $136,500 for heads of household.
What about limits on kids?
There are no limits on the number of children that qualify. The definition of child will be the same as for the child tax credit (you’ll find the age and other requirements at that link).
Will I need a Social Security Number to get a check?
Yes. Or in the alternative, an adoption taxpayer identification number. Ditto for spouses and kids.
So how does this work? Do I need to file anything to get my check?
Technically, the checks are advances of refundable credits. Treasury will advance your check based on your most recently filed tax return (2018 or 2019 tax return). If you haven’t filed a tax return, the bill allows Treasury to use the information on your 2019 Form SSA-1099, Social Security Benefit Statement, Form RRB-1099, Social Security Equivalent Benefit Statement.
What is a refundable tax credit?
The check acts like a refund you get in advance. When you file your 2020 tax return, the IRS will compare your income numbers. If you should have gotten more than you did, you’ll get a refund. If the numbers on your 2020 tax return are different from your 2019 tax return, I don’t expect that you’ll have to pay it back (as the bill is written now). Don’t worry: most taxpayers should get just the right amount.
Is my check taxable?
No. This is not taxable income.
What if I am expecting a refund for the 2019 tax year?
Your 2019 refund will not be affected by the stimulus check.
What if I’ve moved?
Under the law, the Treasury must send notice of the payment by mail to your last known address. The notice will include how the payment was made and the amount of the payment. The notice will also include a phone number for the appropriate point of contact at the Internal Revenue Service (IRS) if you didn’t receive the payment. You can help make sure that it goes to the right place by updating your address after a move. Usually, you’d do that on your tax return, but you can also submit a federal form 8822, Change of Address (downloads as a PDF). It generally takes four to six weeks to process a change of address.
What about retired folks?
Retired seniors are eligible.
What about those on government benefits? And those with no income?
Yes, eligible folks include those with no income, as well as those whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits.
Is my check subject to offset?
No. If your refund would normally be seized to pay a debt, that shouldn’t happen here. Shouldn’t. Assuming it works as planned.
This is a done deal, right?
Mostly. It cleared a hurdle in the Senate on Wednesday night and is expected to pass in the House. The President, through Treasury Secretary Mnuchin, has expressed a desire to sign a relief bill quickly.
So no changes?
I didn’t say that. There could be additional guidance from the IRS. I’ll let you know by updating this page.
Where can I find this in writing?
You can read the Congressional Record, which notes the discussion about the checks, the vote and the text here (downloads as a PDF).
We will update the following section with recent questions regarding the relief money.
Updated: 03/26/2020 9:48PM PST.
What if I didn’t file 2018 taxes?
Pomerleau says nonfilers, including recent college graduates, and those who didn’t file 2018 taxes because they had no obligation, “would be left out unless they hurry up and file a return for 2019.”
Americans receiving Social Security benefits are also on file with the government and their payments will be based on those records, he added.
What if I made more than $99,000 in 2018 or 2019?
Those who earned more than $99,000 are not totally shut out from the massive relief package if they expect to make less than that sum in the coming year.
The IRS will allow tax filers to qualify for the relief aid next year, when filing 2020 taxes.
“That of course is no good for someone who needs to pay their bills today,” Pomerleau said, “but all is not lost.”
How Many Stimulus Checks Will I Get?
You’ll get just one payment. Earlier proposals required multiple checks. One plan put forth by a group of Democratic Senators even called for quarterly payments to Americans until the crisis ends. However, the bill passed by the Senate only authorizes a single payment.
Janet Holtzblatt, a senior fellow at the Tax Policy Center, suspects the IRS’s infrastructure, or lack thereof, will create even more delays for desperate people.
In the past it has taken several months for the government to develop, test and install the kind of software necessary to launch a rebate program. But it is unclear, what if anything, the administration has done behind the scenes so far.
“It takes several months to get a program like this up and moving,” Holtzblatt told NPR.
“I hope that they’ve been building their infrastructure in the days between when they first announced they were going to do this and the day of enactment,” she said, adding that in 2008, the process took at least three months.
Will Young Adults Who Live with Their Parents Get a Check?
Even if they have a job or are a student, young adults who still live at home will not get a check if they can be claimed as a dependent on anyone else’s tax return (whether or not they are actually claimed as a dependent on someone’s return). The IRS will look at your 2019 or 2018 tax return to determine if someone could claim you as a dependent.
Nonresident aliens, trusts, and estate won’t get stimulus checks, either.
What If My Check Doesn’t Arrive?
Within 15 days of mailing your check (or directly depositing it into your bank account), you will receive a notice in the mail indicating the method of payment, the amount of payment, and an IRS phone number to call if you didn’t receive your payment.
Both the payment (paper check) and notice will be mailed to your last known address the IRS has on file. If you have recently moved, you should file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure correspondence and payments from the IRS will be sent to your new address.
If you currently owe back taxes to the IRS, will you still get a check?
You should, the bill says that the check is not subject to offsets.
If my daughter is over 17 but a dependent as she is a student and earned way under the $75000 - does she still qualify for the $1200 stimulus? Also, if you use direct deposit for taxes do you still have to register for dd for the stimulus? Thanks.
The second one, I can answer quickly: no. You’re fine.
The first, I’m still wiggling on. I think I come down on the side of no check to the parent for your daughter and no check to her because she’s a dependent. But I’m waiting for guidance.
Updated: 4/10/2020 2:11 PM PST.
When will I get my check?
Beware of Stimulus Payment Scams
Tax Professionals — here’s what taxpayers need to know about stimulus payment processing in order to protect themselves from scammers:
- Be alert for phone scams.
The Internal Revenue Service (IRS), Treasury Department, or any other government agency will not contact you by phone to collect information for stimulus payment processing. Period.
- Be alert for phishing scams.
Government agencies will not email or text you to collect information for stimulus payment processing. Watch for suspicious emails or texts with links or attachments requesting information for processing stimulus deposits or checks. If you receive one, do not click the link or open the attachment. It’s a scam. Delete it.
- Be alert for state-related scams.
State agencies will also not call, email or text you to collect information or a fee to process a stimulus payment. To date, no state has introduced their own version of a stimulus payment.
As of now, we are only aware of one communication a taxpayer will receive from the IRS. No later than 15 days after distributing a stimulus payment, the IRS is required to mail a notice to the taxpayer indicating the payment amount, whether the payment was mailed or deposited, and a phone number to call if the taxpayer did not receive the payment.
Victims or targets of stimulus payment scams should report it immediately to the Federal Trade Commission, www.ftc.gov/complaint.
We will provide more information about the IRS’s plans to process stimulus payments as it becomes available.