The Economic Impact Payment, otherwise known as a stimulus payment or check, began arriving this week, with direct deposits showing as available today, April 15, 2020, the usual annual deadline for submitting taxes (The filing deadline has since been autoextended to July 15, 2020. You don’t need to do anything to get the extension, but you can still file your 2019 taxes. This is all spelled out on the IRS website.)
There are a few ways this is working. Not everyone’s amount will be the same; some who are “high-earners” will receive less, and those who haven’t filed taxes in the last two years will have a chance to file via special website in order to receive the funds.
A Little Beacon Blog is not a tax professional, so please check with your own tax professional about any decisions you make or questions you have.
Payments Are Automatic - If You Have Filed Taxes Within 2 Years And Have Direct Deposit
If you have filed taxes for 2018 or 2019, and have set up direct deposit with the IRS, then the money will hit your account connected to that Direct Deposit.
If you did not file taxes in the last two years - and you aren’t part of groups who don’t need to file taxes (explained below) - then you’ll need to file your 2019 taxes. Learn about that here.
Payments Are Paper Check
If you do not have direct deposit already set up, a paper check is being mailed. If you moved since the last time you filed, you can change your mailing address here.
People Who Don’t File Taxes Can Apply
If you did not file a 2018 or 2019 federal income tax return because your gross income was under $12,200 ($24,400 for married couples), or had no income at all, or you weren’t required to file a 2018 or 2019 federal income tax return for other reasons, you can still apply to receive a stimulus payment (click here). But, if you receive Social Security retirement, disability (SSDI), or survivor benefits, or Railroad Retirement and Survivor Benefits, you don’t need to apply, as your payment information is already hooked up, and the payment will come.
However, if you have qualifying children under 17 who you claim as a dependent, and you are part of those special groups already receiving benefits, then you do need to apply here to get the $500 child credit.
How Much Will The Stimulus Check Be?
Now we are into the nitty-gritty. The straightforward answer is $1,200 for individuals who file single, and $2,400 for couples who file jointly. But - income limits offset this, reducing the amount you will receive if you are a “high-earner.” There is also an additional $500/child credit if you claim qualifying children under 17 years old.
You should read all about the amounts of the stimulus check here, but here are some highlights from the IRS website:
$1,200* for individuals:
Eligible individuals with adjusted gross income of up to $75,000 for single filers
$112,500 for head of household filers
$150,000 for married filing jointly
$2,400* married filing jointly.
*$500 paid in addition per qualifying child under 17 years old (this does not seem to be impacted by “high-earner” status).
“High-Earners”
For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children, are not eligible and will not receive payments.
Some Groups Of People Not Eligible For Stimulus Payment
People who are themselves dependents (like children or elder adults), people who don’t have Social Security Numbers, or are nonresident aliens are not eligible. Read about that here.
Receipt Of Payment
The IRS will be sending a letter 15 days after making payment, showing how your payment was calculated. Read about that here.
Should You File Your 2019 Close To The Original April 15 Deadline (aka Soonish)?
Some accountants believe you should. For the backlog of filings, if you hire an accountant to do this for you, it is probably a good idea to get in line now. According to the IRS, who continues to process electronic tax returns: “As of April 3, the IRS received over 97.4 million tax returns and issued over $213 billion in refunds.”
Especially in light of social distancing at work, even for the IRS, the IRS is urging online filing and writes about it here.
