Below is a list of frequently asked questions regarding the COVID-19 Economic Impact Stimulus Program, introduced as part of the CARES Act. We hope that you will find the information helpful. Please feel free to contact us if you have any questions.
Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Does my child qualify for economic impact payment?
Qualifying dependent child is anyone under 17. If parent is eligible for economic impact payment, they will receive an additional $500 for their qualifying dependent child. Child does not receive a separate stimulus check.
Dependent children 17 and older are not eligible for economic impact payment. A child from age 19-23 who is in college who does not provide more than 50% of their own support from earned income must be claimed as a dependent on the parents’ tax return.
How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
The IRS will use the information from the 2019 tax returns to calculate the payment amount for people who have already filed. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
If the IRS doesn’t have your direct deposit information from your 2018 or 2019 return – and the IRS has not sent your payment – use the Get My Payment application to let the IRS know where to send your direct deposit. You can find more information regarding this on the IRS website.
I am not typically required to file a tax return. Can I still receive my payment?
Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.
Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.
I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return. The IRS also allows you to enter your information on their website.
Nonfilers will not receive the $500 for each qualifying child with their automatic $1,200 payment unless they visit the IRS website soon and enter the required information about the child(ren) in the section labeled “Non-Filers: Enter Payment Info Here” link above. However, the IRS warned that If beneficiaries in these groups do not provide this information soon, they will have to wait until later to receive their $500 per qualifying child.
I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.
How do I check payment status?
You can check the status of your stimulus payment on the IRS website.
If my income is over the limit in 2020 when I file my return will I have to repay the stimulus payments?
The CARE Act terms the COVID-19 economic impact payment as a 2020 advance credit with no reference to repayment of the credit if taxpayers income increases and the credit is phased out when their 2020 return is filed.
There is a possibility that taxpayers who qualify for the credit based on their 2018 or 2019 returns but qualify for a lower or no credit when their 2020 return is filed may need to repay the economic impact payment.
Please do not hesitate to give us a call at (973) 298-8500 if you have any questions or concerns.