By now, you have probably heard all about the economic stimulus payments that were approved through the CARES Act. In general, each individual is eligible to receive up to $1,200 and married couples could receive up to $2,400. Additionally, you may qualify for an additional $500 per child.
You may have questions. Do I qualify? Where is my payment? What if I did not qualify previously, but my income has decreased in 2020?
As of early May, approximately 130 million people have received their payment. Most likely if the IRS has your direct deposit information and you qualified you have already received your payment.
However, there are numerous reasons for delays. The IRS has provided this resource to allow you to track your payment or check if you qualify.
In general, single filers with adjusted gross income (AGI) of $75,000 or less and married couples with AGI of $150,000 or less will receive a full payment. The payment will increase by $500 for each additional qualifying child.
If your adjusted gross income exceeds these limits, you may still qualify for a partial payment. See more detailed information regarding eligibility.
The IRS uses your 2019 AGI (or 2018 information if 2019 is not available) to determine eligibility. However, many people have seen their income decrease due to the COVID-19 pandemic. Remember, the economic stimulus payment will be trued up on the 2020 tax return.
Therefore, if you did not qualify based on 2018 or 2019 AGI, you may still receive a payment based on your 2020 AGI. The bad news – you will need to wait until you file your 2020 return in 2021 to receive your payment.
No, the payment is not taxable. The payment is considered an advance of a 2020 refundable tax credit.
Any changes to dependents that would result in a higher stimulus check will be accounted for when you file your 2020 tax return. Therefore, if you claim an additional qualifying child on your 2020 tax return, your 2020 tax refund would be increased or the amount due decreased accordingly.
No. While the payment is considered an advance credit of your 2020 taxes, it will not increase the tax you owe or decrease your 2020 refund. In other words, even if you received a stimulus check based on your 2018 AGI but would not have qualified based on your 2019 AGI, the IRS will not ask for any money back.
This is the one situation where you should return the money. If someone died before their payment was received, the money needs to be sent back. Click here for detailed instructions.
That is up to you! If you don’t need the money, consider giving an extra tip the next time you order out, helping out a neighbor or donating to a charity helping out during the COVID-19 pandemic.
Maybe. Another round of economic stimulus payment has been proposed as part of the HEROES Act. Under the current proposal, if you qualified the first time, you would also qualify for the second stimulus payment. It remains to be seen whether the HEROES ACT will be signed into law.
Hopefully, this has answered a few of your questions regarding economic stimulus payments. If you have any questions regarding your specific situation, please contact us. We are happy to research and answer any questions we can.