To relieve the financial pressure many Americans are experiencing, the federal government has started to issue $1,200 payments to certain Individual Taxpayers, and $2,400 to married couples.  These payments have been a centerpiece of the $2.2 trillion rescue package meant to provide a buffer against the coronavirus pandemic that has closed much of the U.S. economy.

The U.S. Department of the Treasury and IRS expect roughly 80 million Americans will receive their payments via direct deposit by today (Wednesday, April 15.) These payments are being automatically issued to eligible 2019 or 2018 federal tax return filers who received a refund using direct deposit.

 

Who is eligible to receive a payment?

U.S. residents will receive a payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work-eligible Social Security number with adjusted gross income up to:

  • $75,000 for individuals
  • $112,500 for head of household filers and
  • $150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their AGI is between:

  • $75,000 and $99,000 if their filing status was single or married filing separately
  • 112,500 and $136,500 for head of household
  • $150,000 and $198,000 if their filing status was married filing jointly

The amount of the reduced payment will be based upon the taxpayer’s specific adjusted gross income.  Please use calculator found on the link below that will help provide an estimated total you can expect to receive if your AGI falls somewhere in the phaseout amount:

https://www.kiplinger.com/tool/taxes/T023-S001-stimulus-check-calculator-2020/index.php

Additionally, if you have children who qualify for the child tax credit (they must be 16 years old or younger), you will receive an additional $500 for each child.

 

Who is not eligible to receive a payment?

Taxpayers will not qualify for an Economic Impact Payment if any of the following apply:

  • Your adjusted gross income is greater than
    • $99,000 if your filing status was single or married filing separately
    • $136,500 for head of household
    • $198,000 if your filing status was married filing jointly
  • You can be claimed as a dependent on someone else’s return. For example, this would include a child, student or older dependent who can be claimed on a parent’s return.
  • You do not have a valid Social Security number.

 

Is there any action required to receive payment if you’re under the required AGI income limits?

Individuals who’ve filed their 2018- or 2019-Income Tax return:

  • No action is needed in you’ve already filed your 2019 Income Tax return.
  • Also, no immediate action is required if you’ve filed your 2018 Income Tax Return, but not your 2019 Income Tax Return. The IRS will use information from your 2018 tax filings to determine the Economic Impact Payment calculations.

Individuals who are not required to file a tax return:

  • Recipients of Social Security retirement benefits, Social Security disability insurance (SSDI), Social Security survivor benefits and Railroad Retirement and Survivor Benefits that are under the income requirements to file Income Tax Return – no immediate action is necessary.
    • These recipients will receive their Stimulus payments as a direct deposit or by paper check, just as they would normally receive their benefits detailed above.

 

No Direct Deposit established with the IRS?

For those that have not previously participated in direct deposit with the IRS, physical checks will be mailed as early as April 24th at a rate of five million checks per week throughout the summer.  To allow taxpayers to track the status of their payment, the IRS will be launching an online application called “Get My Payment”. In addition to sharing the status of their payments, this FREE app will allow taxpayers who filed their tax return in 2018 or 2019 but did not provide their banking information to submit their direct deposit information to receive their payment immediately.

 

This is the latest available information as of today, and as more information becomes available LFA will continue to keep you updated. If you or a loved one have any questions or concerns please never hesitate to reach out.