The government announced that they will start distributing stimulus checks to everyone. We will explain how it is determined and the amount. Each person will get up to $1,200, depending on income. Individuals earning less than $75,000 will get the full $1,200. Married couples earning less than $150,000 will get $2,400. For dependent children under age 17, parents will get an additional $500 per child. Again, this is for couples that earn less than $150,000 or individuals that earn less than $75,000. If you earn more than $75,000, there will be a reduced amount and the credit is phased out completely for individuals earning over $99,000. Individuals with income exceeding $99,000 will not get anything at all. Married couples earning more than $199,000 will not receive anything.
Everyone will receive the credit except for four groups of people:
- Those whose income exceeds the limits
- Those who have no social security number. That is, people who are not US Citizens or Resident Aliens with a green card.
- People who owe back child support. Note that people who have other liabilities such as owing back taxes or owing social security will still receive the credit. Only those that are behind in child support payments will not receive the credit.
- People who are age 17 or older and are claimed on parents (or someone else’s) tax return. For example, 17- and 18-year-olds whose parents claim them on their taxes or even older adults such as senior citizens whose adult children claim them as dependents on their tax returns, will also be unable to get the checks. It is only for children age 16 and under whose parents will receive the additional $500.
From the time the Bill was passed and signed into law by President Trump at the end of March, we were told that it would be approximately three weeks. I personally am not so optimistic. Many feel it will take longer such as closer to six weeks. In 2008 when stimulus checks were sent, it took about four months. Right now, we just don’t know for sure when the funds will come but we do know that the government is doing all that they can to get them processed as quickly as possible.
If you’ve already filed your 2019 income tax return and your bank information is on file for direct deposit, or if you are receiving social security, SSDI, or SSI benefits and already have bank information on file for direct deposit, it will automatically be sent to the same bank information. No action is required on your part. If you don’t already have bank information on file with the government, they will mail a check. They may add a website where you can go online to provide bank information but if not, they will mail checks.
If you already filed your 2019 tax return, they will look at your adjusted gross income (AGI) for 2019. If you get stimulus money this year based on your 2018 or 2019 income but then when you file income taxes next year for 2020 and your income is too high and you don’t qualify,you may have to pay it back. Will the government strictly enforce this? We don’t know but it is a possibility. If your income in 2019 was too high to qualify but if you were laid off, lost your job, or your income was otherwise reduced this year to the point that you now qualify, you will be able to get the credit when you file your income taxes next year. So while you may not get it right now, when you file your taxes next year, you can apply for the tax credit on your 2020 return.
If you haven’t filed your taxes because your income is too low and not enough to meet the filing requirements, the IRS suggests that you go ahead and submit a 2019 return anyway. Even though it is not a requirement, this will allow you to provide the IRS with your filing status (single or married) and also provide your bank information too.
