In response to the economic fallout of the coronavirus pandemic, Congress approved an economic-relief plan that includes onetime direct payments to most households. Here are the answers to some of your questions adapted from an article in the Wall Street Journal:
When will I have the money?
Payments began direct depositing in bank accounts during the week of April 13. The government processed payments faster for people who have filed a 2019 tax return with direct-deposit information. The process will be much slower for those who require paper checks.
Is there a way to give the IRS my bank account information to speed up my payment?
The IRS added the “Get My Payment” feature on the website that will let you check the status of your payments and provide updated bank information to get direct deposits instead of paper checks. Direct depositing can accelerate the payment by weeks or months because the government can print just about five million checks a week.
How much money is it?
Each adult will receive $1,200 and children under 17 years old will receive $500. For example: A married couple with two children will receive $3,400.
Nearly any adult with a Social Security number will receive payment, as long as they are not considered a dependent. An adult also gets the payments for the children in their home. Those with income above $75,000 in adjusted gross income for individuals, $112,500 for heads of household (often single parents) and $150,000 for married couples qualify. The payments start shrinking above those levels, and for those with no children, the benefit disappears at $99,000 for individuals and $198,000 for married couples.
How can I get the stimulus payment if I don’t usually file tax returns?
The IRS has created a new simple form for people who have no income or too little income to file a tax return in most years. The form is now available through www.irs.gov/coronavirus, and individuals can register by answering a few basic questions so the IRS can verify address detail, etc.
How does the IRS determine whether you are getting a payment and how much you get?
The IRS will use 2019 tax returns to set the payment amounts and 2018 tax returns if 2019 isn’t filed. Those who haven’t filed tax returns can still file for 2019 to make sure the government has their updated income and bank-account information, as well as 2019 information about recent moves, births, deaths, marriages, and divorces. Just keep in mind that any changes that happened after 2019 will not be reflected in the payments.
The IRS also will obtain information from the Social Security Administration about people who get benefits but don’t file tax returns, including those who receive Social Security disability benefits. The payments will be made in the same way that those people currently get their Social Security benefits. Those payments should start arriving by early May, according to the Social Security Administration.
For people with incomes over the limits, how does the payment work?
Those households should calculate the total amount of the credit, then subtract $5 from that total for every $100 that their adjusted gross income is over the limit. For a married couple with two children earning $180,000, the credit is reduced by 5% of the amount over the $150,000. That is a $1,500 reduction from $3,400, so their payment should be $1,900.
What about people who receive Veterans benefits or Supplemental Security Income but not Social Security?
SSI recipients will receive payments automatically by early May in the same way they get their usual benefits, according to the Treasury Department. Those with dependent children will need to use the IRS website for non-filers to provide information about the children to get the $500 payments for them. The payments won’t affect SSI eligibility. Veterans and their beneficiaries who receive benefit payments will receive the stimulus payments automatically without additional paperwork.
What if I lose a substantial amount of income this year as opposed to 2019?
The advance payments will be determined based on 2018 or 2019 and the final amount of the benefits will be determined based on 2020 income and settled on the 2020
tax return. Therefore, those who qualify for more money than they receive this year (ie, a person whose income drops from $110,000 to $75,000) would get the rest through a larger tax refund or smaller tax payment in early 2021.
But people who ultimately qualify for less money than they got this year—a person whose income rises from $70,000 to $100,000—wouldn’t have to pay it back.
Besides those who make above the income threshold for the payments, is there anyone who doesn’t get a payment?
You must have a Social Security number to get a payment. Also, if you are a dependent on someone else’s tax return and you aren’t a child, you don’t get a payment. This includes some high-school students, college students and some disabled and elderly people, many of whom show up on the tax returns of the people they live with and who provide most of their support. Immigrants who don’t have Social Security numbers also aren’t eligible.
Are the payments taxable income?
No. They won’t be considered as income.
Do children born in 2020 get the payment?
Parents of children born this year won’t get a payment for that child now. However, assuming they qualify based on their 2020 income, they would get $500 added to their tax refund or subtracted from their income-tax bill when they file their 2020 tax returns in early 2021.
What if a household didn’t get the stimulus payment?
You should receive a letter in the mail from the IRS 15 days after the payment has been sent. That letter will include instructions on what to do if your payment didn’t arrive.
This article was adapted from Coronavirus Stimulus Payments: When Will They Be Sent and Who Is Eligible? from the Wall Street Journal online eavailable at www.wsj.com/articles/everything-you-need-to-know-about-the-payments-from-the-government-11585229988