Stimulus Checks – what should you know?
A large part of The CARES Act, passed last week to address the economic ravages of the COVID-19 pandemic, is the stimulus money that will be sent to many Americans. There’s a lot of misinformation out there, so we’ve condensed the reliable information we’ve been able to find into a short FAQ.
Who’s eligible for a payment, and how much will it be?
Anyone earning up to $75,000 in adjusted gross income and has a social security number will receive $1,200. (Married couples filing joint returns will receive $2,400 if they earn under $150,000.) Those earning more than $99,000 ($198,000 for couples filing jointly) are not eligible. Parents will receive $500 for each qualifying child 16 or younger.
The IRS has stated that if you meet the income guidelines, you’ll receive a payment even if you owe back taxes. The exception is if you owe child support. Unpaid child support makes you ineligible for the program. In addition, if you’re claimed as a dependent on someone else’s tax return, you’re not eligible.
What do you have to do to receive your payment?
Most people won’t have to do anything to receive their check. The government will use the information from your 2019 tax return (2018 if you haven’t filed 2019) to calculate and distribute your payment.
There’s conflicting information as to how the money will be distributed if you didn’t include direct deposit information on your last return. There are reports that paper checks will be sent to those filers, while other reports say the IRS/Treasury Department will be setting up an online portal where you can input your information to receive the funds electronically. We suggest monitoring www.irs.gov/coronavirus to see if this happens.
What if you didn’t file taxes in 2018 or 2019?
People who aren’t required to file a tax return will need to file a very simplified tax return to receive the payment. This return will provide the government with the basic information – income, number of dependents, direct deposit information – required to distribute payments.
If you’ve not filed for either of those years, you should do so as soon as possible. There are several free resources for filing taxes, including:
- Taxpayers with incomes below $69,000 can use the IRS' Free File software to do their federal returns.
- If your income is above $69,000, fillable forms are available for free on the IRS website.
- Online tax preparer TurboTax is also offering its basic tax-prep service for free until April 4, allowing you to connect with a CPA or enrolled agent via video chat who will review your tax return line by line.
Will this money be treated as taxable income in 2020? If so, can I refuse the payment?
The stimulus money will not be treated as taxable income for 2020, and you cannot refuse payment. If you are fortunate enough to not need the money, you might consider donating it.
If you have any questions about the stimulus check, please let us know. If you're experiencing financial hardship because of the COVID-19 pandemic, please visit our Hardship Relief Request. Finally, where there's money, scammers always appear. Please take a minute to read this IRS Statement.
The views, information, or opinions expressed in this article are solely those of the author and do not necessarily represent the views of Citizens State Bank and its affiliates, and Citizens State Bank is not responsible for and does not verify the accuracy of any information contained in this article or items hyperlinked within. This is for informational purposes and is no way intended to provide legal advice.