As a result to COVID-19, the Federal Government is taking action to ease the burden to taxpayers by passing the Coronavirus Aid, Relief and Economic Security Act (HR 748), also known as the CARES Act.
The Treasury Department and the Internal Revenue Service today announced that distribution of Economic Impact Payments will begin in the next three weeks and will be distributed automatically, with no action required for most people.
Who is eligible for the economic impact payment
U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income (AGI) up to:
- $75,000 for individuals
- $112,000 for head of household filers and
- $150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
- $75,000 and $99,000 if their filing status was single or married filing separately
- $112,500 and $136,500 for head of household
- $150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific AGI.
Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income (SSI) benefits.
Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.
What amount can I expect to receive?
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child (child must qualify for Child Tax Credit).
Check out our Stimulus Check Calculator.
What are the limits on children?
No limits on the number of children (child must qualify for CTC).
Social Security Numbers (SSN) required?
Yes (or in the alternative, an adoption taxpayer identification number). Spouses and children must have a valid SSN as well. An Individual Taxpayer Identification Number (ITIN) does not qualify.
Do you need to take action?
No additional action is needed by taxpayers who:
- have already filed their tax returns this year for 2019. The IRS will use this information to calculate the payment amount.
- haven't filed yet for 2019 but filed a 2018 federal tax return. For these taxpayers the IRS will use their information from 2018 tax filings to make the Economic Impact Payment calculations.
People who aren't typically required to file a tax return
Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form-SSA and Form RRB-1099 to generate Economic Impact Payments of $1,200 to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group who don't need to take action.
For Social Security, Railroad retirees and SSDI who have qualifying children, they can take an additional step to receive $500 per qualifying child.
There are other individuals such as low-income workers and certain veterans and individuals with disabilities who aren't required to file a tax return, but they are still eligible for the Economic Impact Payments. You can provide the necessary information to the IRS easily and quickly for no fee through Non-Filers:Enter Payment Info Here.
The IRS will use the information to determine your eligibility and payment amount and send you an Economic Impact Payment. After providing this information you won't need to take any additional action.
Information you will need to provide:
- Full name, current mailing address, and an email address
- Date of birth and valid Social Security number
- Bank account number, type and routing number, if you have one
- Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
- Driver's license or state-issued ID, if you have one
- For each qualifying child: name, Social Security number, or Adoption Taxpayer Identification Number and their relationship to you or your spouse
Is the economic impact payment taxable?
No. This will not be taxable on your 2020 tax return.
How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people 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 economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
You can update your direct deposit information as soon as the IRS releases their Get My Payment application.
Visit https://www.irs.gov/coronavirus/economic-impact-payments for the update.
What if I changed my mailing address?
If you have changed your address since the last time you have filed your tax return, you can update the address on record by submitting the federal Form 8822, Change of Address (generally, this process takes 4-6 weeks). 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 if you didn't receive the payment.
Will the IRS call me asking for my bank account information?
No, the IRS and other government agencies will never call asking your SSN or banking information. Do not provide your SSN or bank account information to anyone calling you and claiming to be from the IRS or another government agency.
Will the IRS text or email me asking to verify my bank account information?
No, please beware of phishing schemes from identity thieves claiming to be the IRS or another government agency. Do not click on a link or email if you do not recognize who it is from. The IRS will never text or email you asking to provide your bank account information or verify your bank account information.
Am I required to sign up or pay a fee in order to receive a stimulus payment?
No, please beware of phishing schemes from identity thieves claiming to be the IRS or another government agency. You are not required to sign up or pay a fee in order to receive a stimulus payment.
Information provided by irsg.gov, sbtpg.com, and forbes.com