The Senate unanimously passed a $2 trillion dollar stimulus deal also known as the CARES ACT late last night. The highlight of this package deal includes individual rebate checks to many Americans. The biggest questions now are 1. How will it work? and 2. When should I expect to receive my check?
How much money will I receive?
The Senate stimulus bill provides a $1,200 tax rebate (credit) for individuals and up to $2,400 for joint married filers. Additionally, taxpayers with children under the age of 17 will receive an additional $500 for each child. The IRS is going to look at your 2019 return. If you have not filed your 2019 return, don’t worry, the internal revenue service will refer to 2018.
Do I qualify?
Sounds good, right? Here’s the catch. Not everyone will receive a check. You’ll need to have a valid social security number for you, yourself and children (if any).
NOTE: Adjusted Gross Income (AGI)- refer to line 7 or 8b on your 2018, 2019 income tax return
The phase out limitation for single, head of household and joint filers is $50 for every $1,000 over the listed threshold
- If you are single with no children you will be due a payment of $1,2000 if your AGI is below $75,000. If your AGI exceeded $99,000 it would eliminate completely.
- If you are married with no kids you are due a payment of $2,400 if your AGI is below $150,000. The credit is fully phased out if your AGI were to exceed $199,000.
- If you have kids, it will take more income before all of the payment is wiped out. A married couple with two children who is eligible for the maximum payment of $3,400 wouldn’t lose all of their payment until AGI exceeded $218,000.
What if I didn’t file a return in 2018 or 2019?
You should probably start by filing 2018 as soon as possible or may have to wait until next year or miss out entirely. For Social Security recipients, if neither a 2019 nor a 2018 income tax were filed, then information from their 2019 Social Security Benefit Statement (SSA-1099) could be used instead.
What if I have outstanding tax debts with the IRS?
If your refund would normally be seized to pay an outstanding federal tax liability, that shouldn’t happen here. UNLESS you owe back Child Support. Americans who owe child support could see there refund reduced or eliminated completely. If you owe the IRS for a previous years tax liability, still expect to receive the check if you qualify.
When will I receive my rebate check?
There is limited guidance on when the government will actually be issuing the checks. All that we know as of now is that it will be sometime between now and December 31, 2020. There has been some talk around the White House and Congress by April 16th, 2020. The IRS will use direct deposit if you elected that methoid on your 2018 or 2019 tax return.The good news is that we do know how it will work and who qualifies for the rebate.
This is a huge step by the government as we approach the peak of the coronavirus pandemic and put more money in the hands of millions of Americans. This is just one component of the 800+ page bill. We will continue to monitor and dissect beneficial components for individuals and businesses over the course of the next several days.