The Treasury Department and the IRS announced on March 30th that Economic Impact Payments will be distributed in the next few weeks.
These payments will be distributed automatically, with no action required for most people; however, some people who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.
Who is Eligible?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
Filers with income above those amounts (but less than the maximum) will receive a reduced payment. The maximum income to be eligible to receive a payment is single filers with income exceeding $99,000 and $198,000 for joint filers with no children.
How Much Will I Receive?
The full amount of the Economic Impact Payment is $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
The payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds, up to the maximum income exceeding $99,000/$198,000.
How Will The IRS Know Where to Send My Money?
For people that have filed their 2019 tax returns, the IRS will use this information to calculate the payment. The Economic Impact Payment will be deposited directly into the same bank account reflected on the filed return.
If the IRS does not have your direct deposit information on file, you will receive a check. The Treasury has said that they plan to develop a web portal for individuals to provide their banking information, but that has not yet happened.
What if I Wasn’t Required to File a Tax Return?
People who do not typically file a tax return will need to file a simple tax return to receive the payment, EXCEPT those who receive Social Security payments. The IRS is expected to provide information instructing people in this category on how to file a 2019 tax return with simple, but necessary, information. This would include your filing status, number of dependents and direct deposit bank information.
If you currently receive Social Security payments, the IRS already has access to your income and bank information.
What if I Haven’t Filed My 2019 Taxes Yet?
The IRS will use the information from your 2018 tax return.
What if I Haven’t Filed My Tax Return for 2018 or 2019?
The IRS urges you to file as soon as possible. For those concerned about visiting a tax professional to get help with your tax return, the IRS has said that these payments will be available throughout the rest of 2020.