Tuesday, 2 June 2020
As the coronavirus (COVID-19) pandemic continues to batter the economy — prompting the stock market to plummet and unemployment claims to spike — the U.S. federal government is throwing taxpayers a life raft, in the form of stimulus checks.
Congress has passed a $2 trillion relief bill that aims to provide emergency assistance to individuals, families and businesses affected by the coronavirus pandemic, including one-time payments made to individuals. The amount of money you can expect to see from Uncle Sam, though, is based on a number of factors, ranging from how much money you make to how many children you have.
Under the relief bill — dubbed the CARES Act — most adults who have a valid Social Security number will be able to qualify for a stimulus check, with the size of that check based on your 2019 or 2018 tax return.
You must file a simple tax return if you don’t usually file a return: You also qualify for a stimulus check if you receive Social Security benefits for disability, retirement or Supplemental Security Income, according to the AARP. If you typically do not file a tax return because you receive Social Security benefits or have a low income, however, you will need to file a simple tax return to receive your cash payment.
You must fall below income thresholds: The bulk of those who do not qualify for a stimulus check will likely be high-earners: Under the CARES Act, if you’re an individual with no children who earns over $99,000 or are a married couple that filed jointly and are making more than $198,000, you are not eligible to receive a stimulus check.
You cannot be claimed as a dependent of someone else: Additionally, in order to receive a stimulus check, you cannot be claimed as a dependent of someone else. That’s noteworthy, and may mean that millions of dependents who are not children under the age of 17 could end up missing out on relief checks. As the Center on Budget and Policy Priorities points out, filers only receive an additional $500 for each child under 17, which could be problematic for people who support dependents like the elderly, adults with disabilities and college students.
You must have a valid Social Security number: To receive a rebate check, each member of the household (including children) is also required to have a valid Social Security number. Per the Center on Budget Policy and Priorities, this may mean that households of certain immigrant families with children who are U.S. citizens could still be denied a stimulus check.
The amount of your stimulus check is based off of your adjusted gross income, as well as how many children under the age of 17 you have. Here’s how the one-time, non-taxable payments break down:
However, the checks start to decrease by $5 for every additional $100 of income beyond the following income thresholds:
Certain individuals with higher adjustable gross incomes aren’t eligible to receive a stimulus check at all. The checks completely phase out at the following income thresholds:
The government will determine the size of your cash payment based on the adjusted gross income (or your total gross income minus certain deductions, such as 401(k) contributions) and information reported on your 2019 tax return. For those who have not filed a 2019 tax return, tax returns from 2018 may be used instead to determine your check amount.
If you don’t typically file taxes and have no income – and instead rely on Social Security benefits – you are still eligible to receive a stimulus check. However, in an update on March 30, the IRS stated that those who “typically do not file a tax return will need to file a simple tax return to receive an economic impact payment.” This includes low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return. They will not owe tax.
According to the CARES Act, the cash payments should be made as “rapidly as possible.” On March 30, the IRS announced that the distribution of the payments will begin within the next three weeks.
It’s also worth noting that if you have signed up for direct deposit with the IRS and have chosen to have your tax refunds deposited electronically — as opposed to receiving your tax refunds by mail as a paper check — you will likely receive your stimulus check faster, too.
Still, experts have been critical of that timeline, and have instead said the payment process could take months, not weeks. In 2009, for example, the Internal Revenue Service (IRS) took three months to send out checks to households as a cushion during the Great Recession.
You can expect your stimulus check from the IRS to be either directly deposited into your bank account or mailed to you, based on the method in which you requested to receive your tax refund. However, the IRS also announced that in the coming weeks, the Treasury Department plans to open a web-based portal in which people can share their banking information with the IRS, enabling them to receive their payments via direct deposit as opposed to waiting for a check in the mail.
If you have filed your 2019 or 2018 taxes, there is no action needed from you, and the IRS will issue your payment automatically. In fact, the IRS is actually asking consumers not to contact them about the stimulus checks, stating it will make details available on its website.
To find out how much you can expect to receive from your stimulus check, reference the table below.
As many Americans face furlough or unemployment as a result of the coronavirus pandemic, a recent survey by MagnifyMoney found that most people intend to use their stimulus checks on necessities, like paying bills and buying groceries.
Many experts recommend keeping the money you receive from your rebate liquid, like in an emergency savings account, which should have enough funds to cover three to six months’ worth of living expenses.
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Source: https://www.magnifymoney.com/blog/banking/how-much-will-my-check-be-stimulus-calculator/
