- March 27, 2020
- Posted by: Dane Janas, EA
- Categories: Personal Finance, Personal Tax, Taxes
Reminder: Be vigilant against scams related to Coronavirus stimulus payments. The IRS, Treasury Department, or any other Federal or State government agency will not contact you by phone, e-mail, or text message to collect information for stimulus payment processing. Victims or targets of stimulus payment scams should report them to the Federal Trade Commission.
There is a lot of confusion regarding the newly-announced Coronavirus Stimulus payments package and the potential of receiving checks to assist taxpayers with their expenses and stimulate the economy. To highlight the features of the new stimulus package and to answer some potential questions, we’ve created this guide for our clients and visitors.
How Much Will my Coronavirus Stimulus Payment be?
It depends on how much you make. Use the calculator at right to easily figure out your anticipated Coronavirus stimulus payments:
Single filers that have annual income of $75,000 or less will receive the full $1,200 single payout. Phaseouts will occur between $75,000 – $99,000 of annual income. This phaseout is $5 for every $100 of income that exceeds $75,000. If you’re a single filer making more than $99,000 annually, you’re out of luck.
Married filers that have combined annual income of $150,000 or less will receive the full $2,400 married payout. Phaseouts will occur between $150,000 – $198,000 of annual income. This phaseout is $5 for every $100 of income that exceeds $150,000. If you’re married and you and your spouse make a combined annual income greater than $198,000 annually, you’re out of luck.
Taxpayers that file as head of household that have annual income of $112,500 or less will receive the full $1,200 payout. Phaseouts will occur between $112,500 – $136,500 of annual income. This phaseout is $5 for every $100 of income that exceeds $112,500. If your annual income is greater than $136,500 annually, you’re out of luck.
Additionally, no matter what filing status you use – for each child under age 17 claimed on your tax return, your payout will increase by $500.
What is the Government Using to Determine my Annual Income?
That depends, too. If you have not filed your 2019 tax return yet (not due until July 15, 2020), the government will be using your 2018 tax return.
If you have filed your 2019 tax return already, then the annual income on your 2019 tax return will be used.
Here’s where to look to find your adjusted gross annual income on your 2018 or 2019 tax return:
- 2018: Line 7 on Form 1040
- 2019: Line 8b on Form 1040
When is my Coronavirus Stimulus Payment Coming to me?
The IRS and Department of the Treasury have stated that they will be releasing the Coronavirus stimulus payments in “phases” over the next four to six weeks. For obvious reasons, those who are eligible to receive their payments via direct deposit (see “How is my Stimulus Payment Being Sent?” below) will likely receive their payments first.
The IRS has just released a new tracking tool on their website to track the status of your Economic Stimulus Payment:
Note: This system is being quickly overwhelmed at its release, and has managed to crash just about every other system at the IRS upon being released to the general public. Be prepared for the website to be slow or non-responsive. You may possibly have to try a few times to inquire about your payment status.
What If I Haven’t Filed Tax Returns in 2018 or 2019?
There has been no official guidance released on this situation yet. In the professional opinion of the tax advisors at Boundless Tax, we would urge you to complete your 2018 and/or 2019 returns as soon as possible, and stress seeking out the assistance of a licensed tax professional to do so.
However, if you have special extenuating tax circumstances, please note that the IRS is essentially closed to tax professionals at this point in time – they are powerless to research anomalies with tax account, as IRS phone and fax lines are going un-staffed.
Reach out to a licensed tax professional (like Boundless Tax!) as soon as possible for assistance with filing your 2018 and/or 2019 tax returns so you don’t miss out on your stimulus check.
Where do I Sign Up for my Coronavirus Stimulus Payment?
You don’t – there is no sign up. The payments will be automatic for people who have filed a tax return in 2018 or 2019, or have gotten Social Security benefits recently. The IRS asks people not to call with questions (good luck getting through to a staffed phone line there anyway).
How is my Stimulus Payment Being Sent?
In short, by direct deposit or a mailed, paper check. Here’s a few different scenarios on how this will shake out:
|Received refund via direct deposit or paid taxes due via direct debit||Received refund or paid taxes due via paper check|
|Have not filed your 2019 Federal tax return yet||Direct deposit to bank account shown on 2018 tax return||Paper check to “last known address”|
|Already filed your 2019 Federal tax return||Direct deposit to bank account shown on 2019 tax return||Paper check to “last known address”|
If you are receiving your payment via direct deposit, it will appear as “IRS TREAS 310” in your checking or savings account.
Will There be Multiple Stimulus Payments?
The legislation at the current time only authorizes a one-time payment. But House Speaker Nancy Pelosi suggested to CNN that Congress could potentially revisit the issue in the future: “We think we’ll get more direct payments in another bill.”
President Trump has also said that he is open to another round of direct payments, but only if the economy remains anemic through the spring and an additional “boost” is warranted.
Are the Stimulus Payments Taxable?
No. They are not considered taxable income.
If I Owe Past Due Taxes, Will my Stimulus Payment be Reduced?
No. Only if past child support payments are due would the check be reduced.
I am a Disabled Veteran and do not Pay Taxes. Do I Qualify for a Stimulus Payment?
Yes, although some of the details still need to be worked out. The IRS is expected to set up a system so disabled veterans do not fall through the cracks.
I’m a College Student. Do I Qualify?
That depends. If your parents still claim you as a dependent on their tax returns, then no – you are ineligible. But, if you’ve been working and filing taxes independently in 2018 and/or 2019, you will likely qualify.
Who Will Not Receive a Coronavirus Stimulus Payment?
The main people excluded from receiving a stimulus check are the wealthy, non-resident aliens (foreign citizens who do not hold a green card), and tax dependents – i.e. those who can be claimed on someone else’s tax returns.
I Made too Much Money in 2018/2019 to Qualify. Now I’m Laid Off.
You’re not necessarily out of luck, but you may have to wait a bit. If you made too much money to qualify in your last tax filing, you probably will not be eligible for the cash benefit immediately. But you can apply for it when you file your 2020 tax return if your income drops below the $99,000 threshold (if you’re single) or $198,000 threshold (if you’re married) this year.
I Still Have Questions. What Should I Do?
The Department of the Treasury and the IRS are still figuring out a lot of the administrative details. The IRS created a dedicated Coronavirus page at www.irs.gov/coronavirus.