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The ACA Government Affairs team strives to keep the counseling community connected with important legislative news, updates, and announcements that affect the profession. Questions? Want to get involved in our advocacy efforts? Email us at advocacy@counseling.org 


 

Apr 21, 2020

The CARES Act Stimulus Payments - Part II: How Much Should You Expect and More Information

 

HOW MUCH WILL I RECEIVE?

Individuals whose AGI does not exceed $75,000 will receive $1,200.

Head of household filers whose AGI does not exceed $112,500 will also receive $1,200.

Married couples filing joint returns whose AGI does not exceed $150,000 will receive $2,400.

All eligible recipients are also eligible for an additional $500 per qualifying child who was age 16 or younger by the end of the taxable year.

If you have never filed a tax return, your eligibility will be based on information from a Social Security Benefit Statement or Social Security Equivalent Benefit Statement from 2019. Recipients of Social Security, disability or veterans’ benefits, and eligible retirees will receive a payment.

Taxpayers who are not required to file a tax return because their income is below the filing status threshold, or for other reasons, are eligible. Individuals who have no income and individuals whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits, will receive payments.

Individuals receiving Social Security retirement, disability (SSDI), or survivor benefits or Railroad Retirement and Survivor Benefits will automatically receive $1,200 stimulus payments.

Reductions in Payments

Taxpayers, without a qualifying child, whose AGI does not exceed:

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

will receive a payment reduced by $5 for each $100 above  $75,000/$112,500/$150,000 thresholds.

Each of these listed threshold amounts increases by $10,000 for each additional qualifying child.

Note that, for families with one qualifying child that are eligible to receive an additional $500 payment, their $1,700 payment ($2,900 for taxpayers filing a joint return) will be reduced to $0 if their adjusted gross income reaches the following thresholds:

  • $109,000 for all single or married taxpayers filing separately,
  • $146,500 for taxpayers filing as head of household or
  • $208,000 for married taxpayers filing a joint return.

CALCULATE YOUR EXPECTED ECONOMIC-IMPACT PAYMENT AMOUNT

To figure out the amount of any payment reduction, use the following equations:

 

Reduction = (Excess AGI/100) x 5

(Excess AGI = Actual AGI minus the AGI Threshold Amount)

 

Or use the following steps to calculate the amount:

  • Based on your filing status, subtract $75,000 (individual) or $112,500 (head of household) or $150,000 (married and jointly filing) from your AGI (Line 8-b on your Form 1040). If you will receive a qualifying child payment, adjust your AGI threshold by adding $10,000 for each qualifying child that you have.
  • Divide the resulting number above by 100.
  • Next, multiply that number by 5.
  • This sum provides the amount of the reduction to your stimulus check.
  • To figure out your expected stimulus payment, subtract this amount from $1,200 (if you are a single filer or head of household) or from $2,400 (if you are married and filing jointly).

Example for individuals and families without a qualifying child

For example, if you are a single filer whose AGI is $80,000, you will likely receive a $950 stimulus payment: ($80,000 – $75,000)/100) x 5 = 250 (Your reduction is $250.)

$1,200 – $250 = $950 (Your expected Economic Impact Payment amount is ($950).

Example for families with qualifying children

If a taxpayer filing as head of household has three qualifying children, the taxpayer’s payment will not be reduced if the taxpayer’s AGI threshold does not exceed $176,000. However, if the taxpayer’s AGI is $186,000, their payment will be reduced by $500 (using the calculation and steps provided above), which would make the taxpayer’s expected stimulus check amount to be $700, plus an additional $1,500 ($500 for each qualifying child), for a total of $2,200.

WHEN WILL I RECEIVE MY STIMULUS PAYMENT?

The Secretary of the Treasury began disbursing Economic Impact Payments on April 12, 2020. According to the legislation, no payments will be disbursed after December 31, 2020.

Eligible recipients will receive a notice by mail from the IRS at the taxpayers’ last known address within 15 days of the taxpayer’s stimulus check disbursement, indicating the method by which such payment was made (printed check or direct deposit), the amount of such payment and a phone number for the appropriate point of contact at the Internal Revenue Service to report any failure to receive such payment. If a taxpayer is unsure if they’re receiving a legitimate letter, the IRS urges taxpayers to visit IRS.gov first to protect against scam artists.

HOW DO I UPDATE MY BANK ACCOUNT OR MAILING ADDRESS?

If the IRS does not have your bank direct deposit information from your 2018 or 2019 return—and you have not yet received your payment—visit the IRS Get My Payment webpage. There, you can complete the Get My Payment application, which will let the IRS know where to send your direct deposit or printed check.

  • 2019 Filers: Your payment will be sent using the information you provided with your 2019 tax return. You will not be able to change it.
  • 2018 Filers: If you need to change your account information or mailing address, file your 2019 taxes electronically as soon as possible. That is the only way to let the IRS know about your new information.

WHAT IF I DIDN'T FILE A TAX RETURN FOR 2018 OR 2019?

If you have a filing requirement and have not filed a tax return for 2018 or 2019, you must file a 2019 tax return to receive the payment.

If you are not required to file a 2018 or 2019 tax return, go to Non-Filers:Enter Payment Info Here.

WILL I RECEIVE A PRINTED CHECK OR A DIRECT DEPOSIT?

 Printed Check

You will receive a printed check if the following applies to you:

  • If you filed your 2019 or 2018 tax return, but did not receive your refund by direct deposit, your payment will be mailed to the address on file with the IRS, even if you also receive Social Security or Railroad Retirement benefits by direct deposit. This is generally the address on your most recent tax return or as updated through the U.S. Postal Service (USPS).
  • If you did not receive your refund by direct deposit based on your 2019 tax return (or 2018 tax return, if you haven’t filed your 2019 tax return), you have the opportunity to provide bank account information through the IRS Get My Payment  tool before your payment is processed.

Direct Deposit

Your payment will be directly deposited in your bank account information based on the following:

  • If you received a direct deposit of your tax refund based on your 2019 tax return (or 2018 tax return, if you haven’t filed your 2019 tax return), the IRS has sent your payment to the bank account provided on the most recent tax return.
  • If you filed a Form 8888 (Allocation of Refund) with your tax return to split your refund into multiple accounts, your payment was deposited to the first bank account listed. You cannot change your bank account information.

Note: According to the IRS, direct deposit is the fastest way to receive your payment.

HOW DO I TRACK MY STIMULUS PAYMENT STATUS?

You can check on the status of your stimulus payment by visiting the Get My Payment web page on the IRS website.

IS THIS PAYMENT TAXABLE?

No. According to the IRS, Economic Impact Payments are not taxable. The payment is not income, and therefore, you will not owe tax on your payment. When you file your 2020 tax return next year, your stimulus payment will not reduce your refund or increase the amount you owe. Additionally, these payments will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs. 

For more information, go to the IRS Economic Impact Payment Information Center.

 

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