Stimulus Checks: How Much Americans Can Expect to Get

On Friday, March 27, President Trump signed into law the largest economic relief bill in the history of our country in hopes of providing relief to individuals, families, and businesses affected by the COVID-19 pandemic. 

The CARES Act includes stimulus payments, additional healthcare funding, loans and grants to businesses to deter layoffs, and strengthened unemployment insurance. 

There’s a lot in this $2.2 trillion bill. One provision that’s top of mind is the stimulus checks. Specifically, who will get what and when. 

Stimulus Checks 

IRS changes
 
Financial relief is on its way to many Americans, but not everyone will get a stimulus check. Here’s everything you need to know… 

Who Is Eligible to Receive Stimulus Money?

Eligible individuals include anyone who is a legal resident, anyone who is not claimed (or eligible to be claimed) as a dependent on someone else’s tax return, and anyone who doesn’t earn too much.

How Much Can I Expect to Receive? 

Stimulus amounts listed below will be paid out based on 2019 income or 2018, if you have not filed your 2019 tax return (click here for IRS deadline extensions ).

⇒ Individuals who earn $75,000 in adjusted gross income (AGI) or less would get payments of $1,200 each.

⇒ Married couples earning up to $150,000 in AGI will receive $2,400.

⇒ Those with children will get an additional $500 per qualifying child under the age of 17.

Payments start to phase out for individuals earning $75,000 or more adjusted gross income or married couples filing jointly earning more than $150,000 AGI, and heads of household with AGI over $112,000. For every $100 of income above the threshold, checks will decrease by $5. 

It phases out entirely for individuals earning $99,000,  $198,000 for couples without children, or $136,500 for heads of household. 

Forbes has a great stimulus calculator for you to determine exactly how much you will get. Check it out here

Wait, What Defines a Qualified Dependent? 

Parents with older children may not like this, so take a deep breath and keep reading.

The additional $500 only applies to children under 17. The bill uses the same definition for a child as the child tax credit does. 

The child must be under 17 at the end of the tax year. So, if you have a high schooler that’s 17 or 18 or college-age kids living with you and you still claim them as a dependent, you will not receive an additional $500 for that child.  

Even if they sleep under your roof and you feed them and give them money–even if they earn a little money on the side–dependents 17 and older are not eligible to receive a separate check. 

Generally, a full-time college student under the age of 24 is considered a dependent if their parent(s) provide more than half of their support. If you aren’t sure whether a child provided more than half of his/her own support, check out this IRS Worksheet for Determining Support

Children who are not considered dependents of their parents are eligible for stimulus money. If the child is not currently filing his/her own taxes, he/she may want to consider filing a tax return with the IRS even with no taxable income.

Is There a Limit on Qualified Dependents?  

There are no limits on the number of children that qualify. 

Related: 

What If I’m Retired? 

If you retired, you are eligible as long as you meet other criteria, such as the income threshold or Social Security requirements. 

My only income is from Social Security or Veterans’ Disability Payment. Am I eligible?

Yes, as long as you are not the dependent of another taxpayer.

If you depend on Social Security but normally don’t file a tax return because you earn too little to file a return, you do not need to file a tax return to get the check. The bill also provides IRS with additional tools to locate and provide rebates to low-income seniors who normally do not file a tax return by allowing them to base a rebate on Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, which is the equivalent of the Social Security statement for Railroad Employees. 

However, seniors are still encouraged to file their 2019 tax returns to ensure they receive their recovery rebate as quickly as possible.

Will I Be Taxed on This Money? 

No, this is not considered taxable income. 

I’m Eligible. What Do I Need to Do to Get My Money? 

According to the IRS website, you don’t need to do anything. The U.S. Treasury will advance your stimulus check based on your most recently filed tax return (either your 2018 or 2019 return). 

What If I Didn’t File a Tax Return for 2018 or 2019? 

To ensure you receive your money, you need to file a 2019 tax return. You can do this free online using the IRS Free file program

The bill also instructs the IRS to alert all individuals of their eligibility for the rebate and how to receive it if they have not filed either a 2019 or 2018 tax return.

If you receive Social Security or disability benefits but earn too little to file returns, the bill allows the U.S. Treasury to use the information on your 2019 Form SSA-1099, Social Security Benefit Statement, Form RRB-1099, or Social Security Equivalent Benefit Statement.

Related: 

When Will My Money Arrive?

Treasury Secretary Steven Mnuchin told CNBC on March 26 that direct deposits would be made within three weeks.¹

If you’ve used a bank account for direct payments to or refunds from the IRS, your money will be direct-deposited. If you do not have a bank account on file with the IRS, they will mail the checks to the most recent address on file. Checks will take longer to arrive than direct deposit. 

How Do I Verify the IRS Has My Correct Address?  

Checks will be mailed to the address on your last tax return, so look that up. If it’s correct, there’s nothing for you to do. If you have moved since your last tax return, you can submit a federal form 8822, Change of Address to let the IRS know. Please note it takes about four to six weeks to process a change of address request.

Under the law, the U.S. Treasury must mail notice of the payment, how the payment was made, and the amount of your payment to your last known address. The notice will also include a phone number for the appropriate point of contact at the IRS if you didn’t receive the payment. 

I Am Expecting a Tax Refund for 2019. Will I Still Get It?

Yes. Your 2019 refund will not be affected by your stimulus check.  

What If I Have Past Due Debt to the IRS or Owe Back Taxes? 

If you owe the federal or state for taxes or owe back taxes, you will still get your stimulus check, providing you meet the income requirements listed above. 

The bill turns off almost all administrative offsets that would reduce tax refunds those who owe or who are behind on payments to federal and state governments. 

However, if you owe past due child support payments that states have reported to the U.S. Treasury, you will not receive a check

What If My Income Was above the Threshold in 2019, but I’ve Lost My Job This Year? 

Technically, these checks are an advance on a 2020 tax credit you can claim on your 2020 return. So if your income has changed year-to-year, and your 2019 adjusted gross income is over the threshold but your 2020 income is much lower, you’ll be eligible for the payments when you file your 2020 returns. In other words, you will be eligible for the refund or can reduce your tax liability when you file your 2020 tax return next year.

401(k) Maneuver does not provide tax or legal advice. Please consult your tax or legal professional if you have questions regarding your specific situation.

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Sources:

  1. https://www.cnbc.com/2020/03/26/coronavirus-stimulus-checks-will-come-within-three-weeks-mnuchin-says.html
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