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Federal Stimulus Information
Directly from our amazing accountant, Veronica Santee:
I have been receiving a ton of questions related to the Economic Stimulus Package that was passed last week. Below is a bunch of common questions and answers to help determine if you are eligible and how much you may be receiving, according to the following New York Times article https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html. The IRS has not issued specific guidance yet, but this is the most up to date information I have as of today.
How large will the payments be?
Most adults will get $1,200, although some would get less. For every qualifying child age 16 or under, the payment will be an additional $500.
How many payments will there be?
Only one at this time. Future bills could order up additional payments, though.
How do I know if I will get the full amount?
It depends on your income. Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will get the full amount. Married couples with no children earning $150,000 or less will receive a total of $2,400. And taxpayers filing as head of household will get the full payment if they earned $112,500 or less.
Above those income figures, the payment decreases until it stops altogether for single people earning $99,000 or married people who have no children and earn $198,000. According to the Senate Finance Committee, a family with two children will no longer be eligible for any payments if its income surpassed $218,000.
You can’t get a payment if someone claims you as a dependent, even if you’re an adult. In any given family and in most instances, everyone must have a valid Social Security number in order to be eligible. There is an exception for members of the military.
You can find your adjusted gross income on Line 8b of the 2019 1040 federal tax return.
Do college students get anything?
Not if anyone claims them as a dependent on a tax return. Usually, students under the age of 24 are dependents in the eyes of the taxing authorities if a parent pays for at least half of their expenses.
What year’s income should I be looking at?
2019. If you haven’t prepared a tax return yet, you can use your 2018 return. If you haven’t filed that yet, you can use a 2019 Social Security statement showing your income to see what an employer reported to the I.R.S.
What if my recent income made me ineligible, but I anticipate being eligible because of a loss of income in 2020? Do I get a payment?
The plan does not help people in that circumstance now, but you may benefit once you file your 2020 taxes. That’s because the payment is technically an advance on a tax credit that is available for the entire year. So it will depend on how much you earn.
And there are many other provisions in the legislation. You may be able to file for unemployment or for one of the new loans for small business owners or sole proprietors.
Will I have to apply to receive a payment?
No. If the Internal Revenue Service already has your bank account information, it will transfer the money to you via direct deposit based on the recent income-tax figures it already has.
When will the payment arrive?
Treasury Secretary Steven Mnuchin said he expected most people to get their payments within three weeks.
If my payment doesn’t come soon, how can I be sure that it wasn’t misdirected?
According to the bill, you will get a paper notice in the mail no later than a few weeks after your payment has been disbursed. That notice will contain information about where the payment ended up and in what form it was made. If you couldn’t locate the payment at that point, it would be time to contact the I.R.S. using the information on the notice.
What if I haven’t filed tax returns recently? Will that affect my ability to receive a payment?
It could. File a return immediately, at least for 2018, according to the I.R.S. website. “Those without 2018 tax filings on record could potentially affect mailings of stimulus checks,” the site says.
If you’re worried about money that you owe that you cannot pay, the I.R.S. recommends consulting a tax professional who can help you request an alternative payment plan or some other resolution.
Will most people who are receiving Social Security retirement and disability payments each month also get a stimulus payment?
Will eligible unemployed people get these stimulus payments? Veterans?
Yes and yes.
Will U.S. citizens living abroad get a payment?
Yes, as long as they meet the income requirements and have a Social Security number.
Do I have to pay income taxes on the amount of my payment?
If my income tax refunds are currently being garnished because of a student loan default, will this payment be garnished as well?
No. In fact, the bill temporarily suspends nearly all efforts to garnish tax refunds to repay debts, including those to the I.R.S. itself. But this waiver may not apply to people who are behind on child support.
Below are direct links to the IRS website for up to date information of tax relief.
Here is a link to the IRS Notice 2020-59 for People First Initiative, which explains the suspension of some collections and other temporary adjustments.
Veronica Santee, EA
Streamlined Tax Solutions, LLC
(480) 636-7993 Office
(888) 430-3324 Fax
890 W. Elliot Road
Gilbert, AZ 85233