The IRS has approved an economic stimulus package due to the spread of the Coronavirus (COVID-19).
A $2 trillion economic plan was passed by the Senate to combat the affects of COVID-19 on Americans. This stimulus plan includes payments to individuals, the self-employed, unemployment coverage, and more.
Here are some common questions about the coronavirus stimulus checks.
Do I have to apply for the stimulus check?
No. The IRS will be looking at either your 2019 or 2018 tax return to determine if you’re eligible based on your income. This will be automatically done by the IRS by working with the Social Security Administration.
How much and how frequent are the payments going to be?
You will only get one payment, for now. However, individuals receive up to $1,200, joint filers get up to $2,400 and taxpayers receive an additional $500 per child. For unemployed individuals, it depends on your state.
The plan states that the maximum unemployment benefit increases by $600 per week. Laid-off workers will receive their full pay for 4 months. The benefits will be more accessible and includes part-time, self-employed, freelancers, and gig economy workers.
When can I expect my payment?
As of right now, the IRS plans on delivering stimulus payments within the third week of April.
Are there any limitations?
Like many tax benefits, there are thresholds. In other words, the coronavirus stimulus checks phaseout for adjusted gross incomes (AGI) above $75,000, $150,000 for joint filers and $112,500 for head of household. This number is before your standard or itemized deductions.
- Line 8b of 2019 Form 1040
- Line 8 of 2018 Form 1040
The good news is, the Senate states that anyone with a social security number who is not a dependent of anyone else should be eligible for a check under the income caps.
If I earn above the income threshold, will I be disqualified?
Not necessarily. The word “phaseout” means more income you earn, the less of the tax benefit you’ll receive. Click here to visit the IRS page for the most updated information on the coronavirus related tax relief.
How will I get my payment?
First, the IRS will try to locate your most recent direct deposit method. To update all direct deposit information, click the “Get My Payment” button via the IRS website. Click here to go to the IRS page.
For taxpayers who did not file a 2018 or 2019 tax return who do not have to file a return, click the “Non Filer’s: Enter Payment Info Here” button.
However, if you moved, and did not provide direct deposit information, the IRS will send a notice of the payment by mail to your last known address. It will include the amount and how the payment was made. If you didn’t receive the payment, you can call the number of contact on the notice.
Do I have to report it on next years’ tax return?
Luckily, this is a non-taxable payment and you do not need to repay it next year.
Do I still get a payment if I’m not required to file?
Yes, even if you receive social security or retirement benefits, you are still eligible to receive stimulus payments. The IRS will pull the information from your forms such as the SSA-1099 or RRB-1099 for taxpayers who do not need to file a tax return.
However, the IRS will not include the extra $500 for dependents since they do not have that information when using those forms. The coronavirus stimulus checks are a way to assist taxpayers in their time of need, regardless of their eligibility to file.
What if I haven’t filed my 2018 or 2019 tax returns?
Although the tax deadline has been extended, the IRS recommends that you file either tax return as soon as possible. This ensures that you will receive your stimulus payment.
You can do this online by creating an account, entering your tax information, and submitting your 2019 tax return for e-file (of 2018 tax return for paper-file).
Tags: 2018 tax return, 2019 tax return, 2020, coronavirus, coronavirus stimulus check, COVID19, direct deposit, e-file, economic stimulus, extended tax deadline, extended tax filing deadline, FAQ, stimulus check, threshold