In March 2020, Congress Passed the Coronavirus Aid, Relief, and Economic Security Act, CARES Act. The stimulus payments for the CARES Act is a $2.2 trillion legislative behemoth that seeks to stimulate the economy and provide relief to individuals and businesses affected by the COVID 19 epidemic. One provision of the CARES act are the Economic Impact Payments or Stimulus Payments. Economic Impact Payments (or stimulus payments) provide families with up to $2,400 for married filing joint taxpayers, and up to $1,200 for individuals with other filing statuses. There are additional payments for of up to $500 per qualifying child. This blog seeks to answer some of the most common questions people may have about the COVID 19 stimulus payments.
Who Gets the Payments
Most Americans will qualify for a stimulus payment: however, there are some limitations. Married Filing Joint Taxpayers with incomes above $198,000 will not receive any stimulus payment. Head of Household taxpayers with incomes above $136,500 will not receive any stimulus payment. Single and Married Filing Separate Taxpayers with income above $99,000 will not receive stimulus payments either.
Taxpayers in the phase-out range ($198,000-$150,000 for Married filing joint, 136,500-112,500 for head of household, and $75,000-$99,000 for single taxpayers) will receive reduced stimulus payments. Taxpayers can also receive an additional $500 payment per qualifying child that is also subject to phase out based on income.
Other individuals are not eligible for stimulus payments. These individuals include non-resident aliens and taxpayers who are claimed as a dependent on someone else’s return.
How Much Will My Stimulus Payment Be?
If you filed jointly and your income is below $150,000, you will get a $2,400 payment. You will also get a payment of $500 for qualifying child. Taxpayers filing Head of Household who have income below $112,500 will get a $1,200 payment along with a $500 payment for qualifying child. Married filing separate taxpayers with incomes below $75,000 will get a $1,200 payment along with a $500 payment per qualifying child. Single Taxpayers with incomes below $75,000 will get a $1,200 payment.
Taxpayers in the phase-out range will have their payment reduced by $5 for each $100 they exceed the threshold. ($150,000 for Married filing joint, $112,500 for Head of Household, $75,000 for single and married filing joint). For example, a married filing separate taxpayer that made $85,000 ($10,000 above threshold) will get a $700 stimulus payment.
The $500 per qualifying child payment is subject to the same phase-out limitations above. Head of Household Taxpayers with incomes over $136,500, Married Filing Separate taxpayers with incomes over $99,000, and Married filing Joint Taxpayers with incomes above $198,000 will see their qualifying stimulus payments begin to phase out at $5 for each $100 they exceed the threshold. A Married couple with one Qualifying child and an income of $203,000 per year ($5,000 above the threshold) will get a qualifying child payment of $250.
When will the Payments Occur
The IRS tweeted that it sent out the first payments on April 11th. Within 15 days of payment, the IRS will send a letter to the Taxpayer’s last known address. The IRS is expected to issue more payments in the coming weeks. By law, the IRS cannot make the payments after December 31st, 2020.
What do I do to Get Paid?
Payments will be based on information provided on the Taxpayer’s 2019 return (if filed) or a Taxpayer’s 2018 return. The IRS will directly deposit the payments based on direct deposit information these taxpayers provided on their 2019 or 2018 tax returns. People who filed a 2018 and/or 2019 return and provided direct deposit information only have to wait for the IRS to directly deposit their payment into their bank accounts. The IRS will directly deposit payments to people that receive Social Security or Disability benefits from the federal government and these individuals do not have to do anything else to get their payments.
Many people may not get the swift and automatic stimulus payment for various reasons. Some people have not filed 2018 or 2019 returns. Others who filed returns may not have provided direct deposit bank information. Non-filers should register here. https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here. People that filed a tax return, but need to provide direct deposit information should register here. https://ww.irs.gov/coronavirus/economic-impact-payments. Please note the “Get My Payment” application may not be available yet.
Anybody who has not received their payment should check the “Get My Payment” application at the IRS. https://www.irs.gov/coronavirus/economic-impact-payments. Again, please note the “Get My Payment” application may not be available yet.
I did not get my payment or am having problems. Whom do I call?
The IRS recommends that nobody make any phone calls at this time concerning an economic impact payment. Many IRS call centers are closed at this time because of the COVID 19 epidemic. The Local Taxpayer Advocate Service Field Offices are operational at this time and receiving phone calls, however the Offices are not accepting walk-in appointments. The Taxpayer Advocate Service may be able to assist some people who are having issues with their COVID 19 stimulus payments.
We would caution that many Taxpayer Advocate Service Offices were backlogged before the COVID 19 epidemic and we can only anticipate the backlogs are only getting worse with the onset of the COVID 19. One should be prepared to expect significant delays when reaching out to the Taxpayer Advocate Service Office. You can read about the Taxpayer Advocate Service here. https://taxpayeradvocate.irs.gov/contact-us.
I owe money to the IRS and it intercepts my tax refunds every year. Will I get a stimulus payment?
You should receive a stimulus payment if the IRS intercepts your tax refunds to pay off a federal or state tax debt. The IRS will only intercept stimulus payments if it intercepts your tax refunds because of unpaid child support obligations.
My Family Status or Income changed in 2019. How do I let the IRS know about this so I can get a larger payment?
The COVID 19 stimulus payments are based on income and family status. Married taxpayers receive a higher payment and have a higher income ceiling. Taxpayers with children get an extra $500 payment for a qualifying child. A Taxpayer that had a drop in income in 2019, got married in 2019, or had a child could expect a larger COVID 19 stimulus payment.
According to the IRS’ March 30, 2020 bulletin, the IRS will base COVID 19 stimulus payments on the 2018 return or the 2019 return (if not on file). The IRS has not indicated if or how taxpayers may update their information to get a larger stimulus payment. If your family situation or income has changed allowing you to collect a larger stimulus payment, we would recommend electronically filing your return as soon as possible if you have not already done so. We would also recommend checking in with the IRS website at https://ww.irs.gov/coronavirus/economic-impact-payments for news and updates.
We are continuously receiving Coronavirus news and updates. The IRS is continuously issuing new pronouncements and information as it is taking on the monumental task of helping distribute $2.2 trillion of relief to millions of American Taxpayers. Check in with the IRS at www.irs.gov for the very latest news and information. Most of all, please keep yourself and your family safe during these uncertain times.
Published by Joe Cole