COVID-19 continues to cause havoc on cultures and economies all across the planet. In the United States, millions of people have already been laid off as companies close down or scale back, leaving many to wonder how they will pay their bills.
After intense bipartisan negotiations, Federal lawmakers released a $2 trillion economic stimulus plan Friday that would give coronavirus stimulus check of up to $1,200 to most Americans as a way to bring money directly into the hands of families struggling to handle the coronavirus pandemic’s economic effects.
The bill would include a one-time deduction for $1,200 for single parents who reported $75,000 or less adjusted gross income on their 2019 tax returns, according to draft legislation. Married couples who filed together would get $2,400. Families will receive a further $500 per child.
The package provides relief for families by stimulus checks that are sent directly to most Americans’ homes, expanded unemployment insurance, paid sick leave, temporary student debt relief and more.
Here’s what consumers need to know about the stimulus package.
Who is eligible?
A much-anticipated feature of the final stimulus bill is the checks that the majority of Americans will get. Such one-time payments will be given to eligible people. This is to ensure that someone who is a legal citizen is not reported (or eligible to be reported) as being dependent on the tax return of someone else and may not earn too much.
Upper-income people are not eligible for checks; benefits start phasing out for single filers with adjusted gross income over $75,000; married couples filing with AGI above $150,000, and household heads (that’s a single individual with dependents) with AGI above $112,500.
What about people on Social Security?
People on Social Security are eligible for the coronavirus relief benefit if their gross income does not exceed the cap. Low-income Americans do not need to file a tax return on Social Security.
As long as they receive a Social Security Benefit Statement (SSA-1099) form, the federal government will be able to give them a check in the normal way they obtain a Social Security benefit. The special allowance is valid for both veterans and persons with disabilities.
Who won’t get a check?
The main people excluded from receiving a payment are the rich, “non-resident aliens” and “dependents” who may be claimed on the tax return of someone else.
When will I get my coronavirus stimulus check?
Checks will be produced “as soon as possible”. Mnuchin has indicated that they should arrive in April, although it has been reported that it could take up to two months. One thing is true: if you’re using direct deposit, you’re going to get your money quicker.
How big will my check be?
American adults will be granted the following one-time payments:
- $1,200 payment to individual taxpayers
- $2,400 payment for married couples filing jointly if their household income is below $150,000. Similarly, that amount is reduced gradually up to $198,000.
- An additional $500 per qualifying child under the age of 17.
- People with little or no tax liability would get at least $600 (or $1,200 for joint returns).
- The payment would be progressively reduced for higher-income earners, starting at $75,000, or $150,000 for a joint return.
- Those filing as a “head of household,” typically single parents, will receive the full $1,200 check. This is if they earn up to $112,500 a year, and reduced checks up to $136,500 annually.
**Stimulus sums will be paid out based on income for 2019 (or 2018, if a person has not yet filed their tax return for 2019). This calculator can help you determine how much you might receive in a stimulus check.
What about limits on kids?
There are no restrictions on how many children qualify for the payment. This is as long as they are under 17 and the family meets the income requirements.
Will I need a Social Security Number to get a check?
YES. Or in the alternative, a taxpayer identification number. Spouses and children will need an SSN or taxpayer ID.
Do I need to file anything to get my check?
Technically the checks are refundable credit advances. Depending on your most recently filed tax return (2018 or 2019 tax return) the Treasury will advance your check. If you did not file a tax return, the bill will allow the Treasury to use your 2019 information on your 2019 Form SSA-1099, Social Security Benefit Statement, Form RRB-1099, Social Security Equivalent Benefit Statement.
What’s the cutoff date to file my 2019 tax return and get a check?
If you can, you can file them ASAP. The IRS hasn’t said when the checks will begin to be processed, but it will likely be early. Submitting a return for 2019 is particularly relevant for people who need to update their direct deposit details. This is also the same for individuals who may not qualify for a coronavirus stimulus check. It is based on their tax return for 2018 but will apply based on their details for 2019.
What happens to people who earned too much in 2018 and 2019 but now lost their job?
This is a very complicated case. Unfortunately, those employees are not automatically eligible for $1,200 checks. They’d get the rebate next year while they are filing their 2020 returns. The Treasury could develop a program to get money for these people faster, but nothing has yet been confirmed.
What if my income is higher in 2020?
You don’t have to pay anything to the Government. It will not matter because the government is going to base it on your 2019 and 2018 tax returns.
I have a lot more questions. What should I do?
The Treasury and IRS continue to work out many of the specifics. Until now, the detail is not accessible beyond what is found in the legislation. The IRS created a website and will keep every update posted.
Learn More: Your Healthcare Coverage and COVID-19