CORONAVIRUS & YOUR TAXES

STIMULUS CHECKS

What you need to know

The Stimulus Package has officially been approved and payments are on the way to many Americans. There are still SEVERAL parts of the process that have not been confirmed and will continue to update in the coming days. Listed below is some important information that has been confirmed.  

YOU SHOULD FILE YOUR 2019 TAX RETURN IMMEDIATELY BECAUSE...

Stimulus payments will likely go to people who filed 2019 returns first, followed by those who only filed their 2018 return

If you are receiving a refund it can be delayed significantly as IRS staff prioritizes stimulus payments

You need to ensure the IRS has your updated information on file such as address, filing status, income, dependents, and direct deposit info

Q:

What Are The Requirements To Qualify? 

  • U.S. Citizen (Valid Social Security Number)

  • 18 Years of age or older (Cannot be claimed as a dependent even if an adult)

  • You MUST file a 2019 or 2018 Federal Tax Return even if you don't have taxable income to report.  (If you receive Social Security benefits tax return not required)

Q:

How Much Will The Payments Be? 

The amount for payments will be based on your most recent tax return Filing Status and AGI.
(Can be found on line 8b of your 1040 form for 2019 Return)

 

  • Single, Head of Household or Married Filing Separate:

    • $1200 + $500 per qualifying child 16 years old or under

  • Married Filing Joint:

    • $2400 + $500 per qualifying child​​ 16 years old or under

STIMULUS AMOUNTS PER FILING STATUS

 

  • Single or Married Filing Separate:

    • Full= $0 - $75k               Reduced= $75k - $99k

  • Head of Household:

    • Full= $0 - $112.5k          Reduced= $112.5 - $136.5k

  • Married Filing Joint:

    • Full= $0 - $150k             Reduced= $150k - $198k

AGI THRESHOLDS FOR FULL OR REDUCED PAYMENTS

Q:

When & How Will You Receive The Payment?

The IRS estimates they will begin sending payments within the next 3 weeks.

But anticipate it taking longer.

  • DIRECT DEPOSIT (Not confirmed yet): The IRS may attempt to direct deposit the payment into the bank account listed on the most recent Tax Return you filed.

  • CHECK: If there is no/incorrect Direct Deposit info on file and you are unable to update your Direct Deposit info you will be mailed a check to the address listed on your most recent Tax Return filed. If you have moved since then you can submit a Change of Address Form 8822 to update your file.

Q:

Will You Receive A Payment If You Owe?

Yes, you will still receive a stimulus payment regardless if you owe a debt for any previous or current year taxes or debt related to student loans. It is still not confirmed if individuals that owe child support will receive entire payment or have it reduced. 

THE IRS IS SUSPENDING ALL DEBT COLLECTIONS!!

Starting April 1st, 2020, for Individuals filing 2019 returns the IRS will temporarily suspend nearly all efforts to collect/ reduce your tax refunds for debts including student loans, and previous year taxes owed to the IRS. But this  may not apply to people who are behind on child support

Q:

Will You Have To Pay Taxes On The Stimulus Payment?

NO you will not have to pay any taxes on the stimulus payment. The IRS considers the payment as an "Advanced Refundable Credit" for your 2020 tax return.

 

Since the IRS is using your 2018 or 2019 tax returns to determine your stimulus payment amount, if your income is different or you had a child during 2020 and should've received more of the stimulus payment, you will receive those additional funds when you file your 2020 Tax Return.

 

Conversely, they will not deduct any stimulus payments you received if your 2020 tax return qualified for a lesser amount.