Am I eligible for the 2020 stimulus check?

Company News | Joseph Cain | Mar 30, 2020

On March 27, 2020, Congress passed and the President signed a $2.2 trillion stimulus bill. Part of the bill provides a one-time direct payment to eligible individuals.

 What can I expect? 

  • $1,200 for each eligible individual.
  • $2,400 for eligible individuals filing a joint tax return.
  • $500 for each qualifying child (under 17).

 Am I an Eligible Individual?

An Eligible Individual is any individual other than:

  • Any nonresident alien individual.
  • Any individual who can be claimed as a dependent of another.
  • An estate or trust.

In addition, you must have a social security number.

Are there any limitations?

The payment is available in full to:

  • Single filers who have an adjusted gross income of $75,000 or less.
  • Head of Household filers who have adjusted gross income of $112,500 or less.
  • Joint Filers who have adjusted gross income of $150,000 or less.

Over these amounts the payment is reduced by 5% of the amount that the adjusted gross income (AGI) exceeds these amounts. So once a single filers AGI reaches $99,000 the benefit is reduced to $0. ($1,200/5% = $24,000 + $75,000 = $99,000).

The benefit for Head of Household filers is reduced to $0 once their AGI reaches $160,500 and the benefit for Joint filers is reduced to $0 once their AGI reaches $198,000.

When can I expect my payment? How will it be paid?

The administration’s   goal is to start payments within 2-3 weeks, but the IRS has not yet announced a schedule. The IRS will deposit the money directly into the bank account that was used on your 2018 or 2019 tax return if you used the direct-deposit option. If the IRS does not have your banking information, they will send a check to the address on your 2018 or 2019 tax return.

What year is the income based upon?

The payment you receive is actually an advance of a credit that you will take on your 2020 tax return. The IRS will use your 2019 tax return to determine eligibility and payment amount. If you have not filed your 2019 tax return yet, they will use your 2018 tax return.

If the IRS sends you a check based on your 2018 or 2019 AGI and your 2020 AGI exceeds the above limits, you will not be required to pay back any of the money you received.

If you file your 2020 tax return and it is determined that your credit is higher than the check that you received, you will get the difference as a credit against your tax liability on your 2020 tax return.

What if I don’t file a tax return? Will I still receive a check?

  • If you receive social security and do not file a tax return you will still get a check, there is no need to file a tax return.
  • If you did not file a return because your income was low and you did not receive social security, you should file a return in order to let the IRS know you are eligible for a check.

Planning opportunities.

  • If you had a child in 2019, file your tax return as soon as possible so you receive the $500 payment now. If you don’t get the return in on time, you will get the $500 credit on your 2020 tax return.
  • If you didn’t file a 2018 tax return, file your 2019 return as soon as possible so you don’t have to wait until you file your 2020 tax return to receive the benefit.
  • Individuals with low income or no income and don’t file tax returns may want to file a 2019 and/or 2020 tax return.
  • If you are delinquent in your tax filings, now is the time to catch-up.

For more information the IRS has created the following website:  Click Here

2022-02-27T15:22:28-05:00