With everything that is going on recently, I’m getting lots of questions about when, how and who will receive the stimulus check as part of the latest government actions. Specifically, I’m talking about the CARES Act passed by the US government just last week. So, here are your coronavirus stimulus questions answered.
Coronavirus Stimulus Questions:
1. Who is eligible for the stimulus check?
You are eligible to receive a check if:
- You are a US resident
- Have an adjusted gross income under
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- $75,000 single
- $112,500 for head of household
- $150,000 married
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- You are NOT the dependent of another taxpayer
- You have a work-eligible Social Security Number
If all the above apply to you, then you are eligible for the full $1,200 single or $2,400 married. You are also eligible for an additional $500 per child under age 17.
2. I have income over the threshold. Am I still eligible to receive any rebate?
The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for:
- $99,000 single
- $146,500 for head of household with one child
- $198,000 for joint with no children
For a typical family of four, the amount is completely phased out for those with adjusted gross incomes exceeding $218,000.
3. What if my income was above the threshold in 2019, but I’ve lost my job due to the coronavirus? Can I still get a rebate check?
If your income in 2019 was in the phase-out range you would still receive a partial check based on your 2019 tax return. However, the stimulus check is actually an advance on a tax credit that you may claim on your 2020 tax return. If your income is lower in 2020 than in 2019, any additional credit you are eligible for will be refunded or reduce your tax liability when you file your 2020 tax return next year.
4. Is the money taxable or will I have to pay it back?
No. The money is treated like other refundable tax credits, such as the child tax credit and earned
income tax credit, and not considered income. Moreover, if the credit amount you qualify based on 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back.
5. Who qualifies as a child for purposes of the rebate?
Any child who is a qualifying child for the purposes of the Child Tax Credit is also a qualifying child for the purposes of the recovery rebate. In general, a child is any dependent of a taxpayer under the age of 17.
This means dependents, other than children under 17, do NOT qualify a taxpayer for an additional $500 per dependent.
6. Are individuals with little to no income or those on Social Security eligible for a stimulus check?
Yes. There is no qualifying income requirement. Even individuals with $0 of income are eligible for a rebate so long as they are not the dependent of another taxpayer.
This means that seniors whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment are eligible. If you don’t earn enough to file a tax return, the IRS will use your Social Security Benefit Statement to determine eligibility. However, seniors are encouraged to file a 2019 tax return to ensure they receive their recovery rebate as quickly as possible.
7. Are college students eligible for a recovery rebate?
If you are NOT a dependent of your parents, then yes. Unfortunately, many full-time college students under the age of 24 are considered a dependent of their parents which makes them not eligible for the Coronavirus stimulus check.
8. What do I have to do to receive it?
For the vast majority of Americans, no action on their part will be required to receive a rebate check since the IRS will use a taxpayer’s 2019 tax return if filed or their 2018 return if they haven’t filed their 2019 return. This includes many individuals with very low income who file a tax return despite not having any tax liability in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit.
If you haven’t filed either 2018 or 2019, they can still pull data from the Social Security Administration where your W2 has been reported.
9. What should I do if I did not file a tax return for 2019 or 2018?
The best way to ensure you receive a recovery rebate is to file a 2019 tax return if you have not already done so. There are many ways to file a tax return as many of you know. You can even file for free online from home using the IRS Free file program.
If you need help or have questions about filing your 2019 or past year’s tax returns, feel free to reach out to me.
10. What if I owe back taxes, will my rebate be reduced?
No. The cares act turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts. The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the treasury department.
I hope this answers many of your coronavirus stimulus questions and how things will be handled. Please ask any further questions below.