April 21, 2020
CARES Act Stimulus Checks
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The CARES Act passed last month by Congress to provide some relief during this pandemic is a large bill. The interpretation and rules are evolving, but this is what we know at this point about the economic impact payments, also referred to as stimulus checks.
Taxpayers earning up to $75,000 a year will get $1,200 for each adult ($2,400 for married couples who file jointly and earn up to $150,000), plus $500 for each child under the age of 17, if they meet all other eligibility requirements. The payment amount has an income-based phase-out; it is reduced by $5 for every $100 earned over the above income limits until it phases down to $0 for an individual earning $99,000 or more, or a couple earning $198,000 or more.
There is a lot of confusion about these payments. It is really a refundable credit on your 2020 federal taxes, given in advance. The amount will be based on your income and family size in 2019, or 2018 if you have not yet filed taxes this year. It will be reconciled when you file taxes next spring. For example, if you add a family member this year and are entitled to a larger payment, you will receive that ‘extra’ amount when you file 2020 taxes.
You do not have to apply for these payments, and they are not taxable. There is also no clawback, meaning if your income in 2020 is over the threshold amount and you received more than you should have, you do not have to pay it back.
Many of you have already received these payments. If you have not, the IRS has added a ‘Get My Payment’ tool on their website at https://www.irs.gov/coronavirus/economic-impact-payments. Here taxpayers can check their payment status, confirm payment type and enter bank account information if the IRS does not have your direct deposit information on file.
For more information on coronavirus tax relief and economic impact payments, visit the IRS website at https://www.irs.gov/coronavirus/.