Original post: April 1, 2020
Last updated: April 28, 2020 at 1:00 p.m. ET
Many of you have likely heard of the stimulus funds being issued to U.S. citizens as part of the CARES Act. At Maryland Volunteer Lawyers Service, our staff attorneys have been following the planned implementation of the payments and have a few key highlights for community members.
- How much will it be?
- It depends. The highest amount is $1,200 for an individual and $2,400 for a married couple. There are also additional credits for “qualifying” children. But the amount may vary based on your income and there are other eligibility requirements including having a social security number.
- When will the funds be issued?
- The federal government has said they will issue funds via direct deposit within the coming weeks, but some might experience delays if they haven’t filed tax returns in the last two years.
- Why is it important if you haven’t filed your federal tax returns?
- To issue stimulus funds, the federal government will be using your 2018 or 2019 tax returns. If you haven’t filed for either year, you might want to file as soon as possible You can go to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free for free options.
- Some individuals may need to complete the IRS’s online tool for non-filers: https://www.irs.gov/coronavirus/economic-impact-payments
- What if I don’t receive mine?
- Currently, there isn’t a way to follow-up on payments. There are a variety of potential delays including if you haven’t filed your taxes, if you will be receiving a check instead of direct deposit or if you’ve moved and the federal government doesn’t have a current address for you. Payments may be issued anytime between now and the end of December.
To get more information on the stimulus funds, please review the attached Frequently Asked Questions, which will continue to be updated as more information is provided. Please be aware that the details of the stimulus funds continue to evolve. MVLS will continue to post updates to this page on our website: https://mvlslaw.org/category/news/
To get current information, visit https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know.
Tax Stimulus Checks FAQs
The Coronavirus Aid, Relief, and Economic Security Act (H.R. 748), or CARES Act, was signed into law on Friday, March 27.
How does it affect me?
Eligible individuals will receive a “Tax Stimulus Check,” also referred to as the 2020 Recovery Rebate Tax Credit. This will provide $1,200 to single individuals and $2,400 to married couples who file jointly. To be eligible, you must have:
- A Social Security number authorizing work. For a married filing jointly couple, both individuals must have a valid Social Security number, authorizing work, in order to receive the Recovery Rebate. One exception to this rule is if one spouse of a married filing jointly couple is a member of the Armed Forces, only one of the spouses need have a valid Social Security number authorizing work.
- Earn under:
$75,000 or less per single or married filing separately taxpayers,
$150,000 or less for a married filing jointly taxpayers, or
$112,500 or less for head of household taxpayers.
If you earn more than these thresholds, you will receive $5 less for every $100 above these thresholds. Individuals with income greater than $99,000 and couples with income greater than $198,000 won’t receive this payment, but they may receive some amount for any “qualifying children” (see below).
- You cannot be claimed as a dependent on another’s tax return for 2020.
Will I get more if I have children?
You will receive an additional $500 for each “qualifying child.” There is no limit to the number of “qualifying children,” but they must meet the following criteria:
- children, grandchildren, brothers, sisters, stepbrothers, stepsisters, nieces, and nephews under age 17,
- have a valid social security number authorizing work (as of December 31, 2020), and
- must live with you as a member of your household in the US for more than one-half of the year.
- This includes adopted children and foster children.
SSA and RRB beneficiaries must have updated this information with the IRS by Wednesday, April 22, 2020 at 12 noon, in order to receive these additional funds with your stimulus check. If you did not update by then, you may still receive this additional amount, but it will not be until you file your 2020 tax return in 2021. This deadline was so short since the IRS is mailing out your stimulus check as soon as possible.
If you are a SSI or VA beneficiary, you must enter information about any qualifying children by May 5,since checks are scheduled to be distributed soon afterwards. If you have children and aren’t required to file a tax return, you should use the Non-Filer tool as soon as possible. Once your $1,200 payment has been issued, you will not be eligible to use the Non-Filer tool to add eligible children. Your payment will be $1,200 and the additional $500 per eligible child amount will be paid in association with a return filing for tax year 2020.
For more details, see this question below: What if I am a benefit recipient with children?
Will I get extra for dependents who are not a “qualifying child,” such as grandparents or children over 17?
No. Non-child dependents don’t qualify. Even if you claim them as dependents, you won’t receive extra money for them.
How does the government know how much I should receive?
They will look at your last tax return on record. If you have not yet filed your 2019 tax return, then they will look at your 2018 return (but not anything earlier).
When will I get the check and how?
The government would like to send these out in 3 weeks. Checks will be deposited into bank accounts listed on 2019 (or 2018) tax returns, if you listed one for a refund. If you did not list one, the government will mail you a check to your last known address (the address on your 2019 or 2018 tax return). A mailed check will take longer to receive since the IRS is already short-staffed and in the middle of tax season. Checks will not be mailed out after December 31, 2020. The IRS is also planning on developing a web-based portal where direct deposit information can be provided to get your check faster.
What if I haven’t filed my 2019 tax return yet?
You should file your 2019 tax return electronically as soon as possible. However, if your 2019 income is higher than 2018, consider whether the difference in income will affect the amount of your Recovery Rebate.
If you still want to file 2019, go to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free for free options.
What if I don’t need to file a return since my only income is Social Security?
If you receive Social Security, SSDI, SSI or Railroad Retirement, you will automatically receive a stimulus check. The IRS will obtain your information from the Social Security Information, and will issue your check in the same way that you receive your social security payments.
Recipients of VA benefits, including veterans and their beneficiaries, will also automatically receive a stimulus check without having to do anything. However, the timing of the checks is still being determined.
What if I am a benefit recipient with children?
If you are a benefit recipient with qualifying children (under age 17, valid social security number, lived with you for more than half the year), there is an extra step needed to claim the $500 for qualifying child. If you filed a 2018 or 2019 tax return including these children, then the payment is automatic. If not, please register by special tool available only on IRS.gov and provide your information in the Non-Filers section. By quickly taking steps to enter information on the IRS website about you and your qualifying children, you can receive the $500 per dependent child payment in addition to your $1,200 individual payment. If you do not provide your information to the IRS soon, you will have to wait until later to receive your $500 per qualifying child.
What if I haven’t filed in years since I had no filing requirement?
You are still eligible for the Recovery Rebate, but the IRS will need to know where to send your check. You should go to IRS.gov, and look for Non-Filers: Enter Payment Info Here (https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here). This will not result in any taxes being owed. This is a secure site, and the information entered will be safe.
What if I have moved since my last tax return?
You should submit a change of address form using Form 8822 www.irs.gov/pub/irs-pdf/f8822.pdf. Otherwise, your check may be mailed to the last address that the IRS has, delaying your receipt of it.
Will I need to report it as income for 2020?
No. It is considered a refundable tax credit for 2020, and not considered as part of gross income or taxable income.
What if there is a difference between my 2020 tax return and my 2019 tax return? Will I need to give the money back?
No. When you file your 2020 tax return in 2021, you will reconcile the estimated Recovery Rebate with your actual Recovery Rebate. If you were due more (such as you had a baby), then you will receive that amount as a refundable tax credit (and receive a larger refund or owe less in taxes for 2020). However, if you received a greater amount based upon your 2019 (or 2018) tax return as compared to your 2020 tax return (e.g., the death of a spouse) you do not have to pay any overpayment back.
I owe back taxes. Will I still get my check?
Yes. Even if you owe back taxes to the IRS, your check amount will not be reduced. This is considered a refundable tax credit against 2020 federal income taxes, so is not considered gross income or taxable income. However, if you owe child support, the check may be applied towards that.
Will I get a check if I only have an ITIN, and not a social security number?
No. Recovery Rebate checks will only be issued to individuals who have social security numbers authorizing them to work.