COVID-19 has impacted the US in ways most of us have never dreamed. For me personally, I never thought I’d be working from home, while my husband is downstairs homeschooling our kids (all in the midst of the craziest time of year for us – tax season).
The federal government is taking action to ease the burden on taxpayers with a massive stimulus package. Here are some common questions I’ve been asked:
You can expect to see a payment in your bank account mid-April or receive a check anywhere from 2 weeks to 2 months.
$1,200 per adult or $2,400 for married couples filing jointly
$500 per qualifying child
Yes. The size of the check will start to phaseout for those that earned more than $75,000 ($150,000 for joint returns and $112,500 for heads of household). This is based on your adjusted gross income (AGI) and can be found on Form 1040 line #7 (2018) or #8b (2019). See our chart above for phase out.
There are no limits on the number of children you have under the age of 17.
Yes. You will need a social security number or a taxpayer identification number. Same for spouses and kids.
No, there is nothing you need to do unless you didn’t file a 2018 or 2019 tax return. If you haven’t filed taxes for either year, the IRS recommends you file as soon as possible.
The Treasury will advance your check based on your filed 2018 or 2019 tax return. If you haven’t filed a tax return, and your income is from Social Security benefits, the IRS will use the information on your 2019 Form SSA-1099 or RRB-1099, Social Security Benefit Statement to calculation your refund.
When you file your 2020 tax return, you will have the chance to obtain the difference. If you receive no check or if you should have received more because the IRS based it off 2018 (maybe income lowered or you had a child), you will be able to correct this on your 2020 return. If the numbers on your 2020 tax return suggest that you obtained more than you should (due to your income), you should not have to pay it back.
No. This is not taxable income.
There will be a direct deposit into the account you used for your last filed tax return. If you are not set up for direct deposit, your check will be mailed using the address on your most recent tax return.
The Treasury is planning to develop a website portal that will allow individuals to provide their banking information to the IRS so that individuals can receive payments immediately. The website is not up yet but it’s coming.
If your bank account information is incorrect, the deposit will not go through and the IRS will mail a check to your last known address by law.
If you moved since your last filed tax return, you should file a Form 8822 (Change of Address) with the IRS and file a change of address notice with the US Postal Service. Note – it generally takes the IRS four to six weeks to process a change of address.
We recommend doing it soon. At Bechtel CPA, we complete all of our returns virtually! We even Zoom with our clients to go over their returns, ensuring we don’t miss anything. It is important that you start the process, even if you have a simple, zero return. Also don’t forget to include your direct deposit banking information on your return!
As long as you meet the other criteria (Social Security numbers, income thresholds, etc.), retired seniors are eligible. If you depend on Social Security but normally don’t file a tax return, the IRS will rely on your SSA-1099 form and will directly deposit the refund in your bank account. No need to file a tax return to get the check.
If they were claimed as a dependent on someone else’s tax return, then no. Usually, students under age 24 are dependents, if a parent pays for at least half of their expenses. If the student filed their own return and claimed themselves, then they should receive their own check.
Within 15 days of mailing your check or direct deposit, you will receive a notice from the IRS by mail to your last known address. It will include how the payment was created and the amount it was for. A phone number for the appropriate point of contact at the Internal Revenue Service (IRS) will also be included if you didn’t receive the payment.
Assuming the CARES act works as planned, yes. You will receive your check even if you owe back taxes.
Under the law, your check can be seized for child support arrears.
It’s possible. Keep your eye out for additional guidance from the IRS. I’ll also let you know by updating this page.
You can read the Congressional Record, which notes the discussion about the checks, the vote and the text here (downloads as a PDF). The IRS has confirmed some of this information and will eventually post more information on its website, but for now, there’s just a banner