|You’ve probably heard that IRS will be making millions of “economic impact payments” (also called “recovery rebates”) in the coming months to help people stay afloat during this time of economic uncertainty related to the COVID-19 crisis. Here’s what you need to know about this program.
Amount of payment. IRS has begun making payments of up to $1,200 to eligible taxpayers or up to $2,400 to married couples filing joint returns. Parents will get an additional $500 for each dependent child under age 17. Thus, the payment for a married couple with two children under 17 will be $3,400.
Who is eligible. U.S. citizens and residents are eligible for a full payment if their adjusted gross income (AGI) is under $75,000 (singles or marrieds filing separately), $112,500 (heads of household), and $150,000 (joint filers). The individual must not be the dependent of another taxpayer and must have a social security number that authorizes employment in the U.S.
Phaseout based on income. For individuals whose AGI exceeds the above thresholds, the payment amount is phased out at the rate of $5 for each $100 of income. Thus, the payment is completely phased out for single filers with AGI over $99,000 and for joint filers with no children with AGI over $198,000. For a married couple with two children, the payment will be completely phased out if their AGI exceeds $218,000.
How to get a payment.
Rebates will be paid out in the form of checks or direct deposits. Most individuals won’t have to take any action to receive a rebate, but some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment. Social Security recipients will automatically receive the stimulus payment without having to file a simple tax return. Low-income taxpayers who do not have a filing requirement will have to register with the IRS to receive a payment. A link has been provided below. .
IRS will compute the rebate based on a taxpayer’s tax year 2019 return (or tax year 2018, if no 2019 return has yet been filed). If no 2018 return has been filed, IRS will use information for 2019 provided in Form SSA-1099, Social Security Benefit Statement, or Form RRB-1099, Social Security Equivalent Benefit Statement.
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. To speed receipt of payment, taxpayers are advised to include direct deposit banking information on the return.
Treasury has developed a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
Economic impact payments will be available throughout the rest of 2020.
Payments nontaxable. Economic impact payments will not be included in the recipient’s income for tax purposes.
Please note. Our office CAN NOT provide you with information on your stimulus payment. Do not call our office with questions on calculation, timing of payment, amount of payment, or messages returned from the IRS’ online system. We cannot provide you with this information because we don’t have it. We can not modify information already provided to the IRS to change addresses, bank accounts, or make things go any faster. We will refer you to the website below for any questions you may have.