Most of us are eligible for federal stimulus payments, but you may have to take action to receive it
When the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.2 trillion package designed to help save lives and the economy during the COVID-19 outbreak, was signed into law on March 27, the first question many of us had was: Do I qualify for a stimulus check? And, if so, how do I get it?
For most working folks like us, the answer to the first question is yes, we qualify. If you are eligible, filed tax returns in 2018 or 2019, and the Internal Revenue Service (IRS) has your direct deposit information, Economic Impact Payments (the official name of the stimulus checks) should be deposited into your bank account near the end of April. If the IRS does not have your direct deposit information, you will have to wait longer to get a check in the mail. If you qualify for the payments but didn’t file taxes in 2018 or 2019, you will have to take action to receive your check. Fill out a simple form provided by the IRS: https://www.irs.gov/coronavirus/economic-impact-payments.
We had our legal experts examine the CARES Act to determine how it will affect UDW members and their families. Here’s what you need to know:
- Payments will be based on the adjusted gross income from 2019 tax returns (or 2018 if you did not file for last year).
- Adults making less than an adjusted gross income of $75,000 annually will receive a $1,200 one-time payment. Smaller payments will be made to individuals making between $75,000 to $99,000.
- Married couples without children making less than $150,000 together will receive a total of $2,400. Payments will go out to couples whose income is as much as $198,000, but those bringing in more than $150,000 won’t receive the full amount.
- Families with children who qualify for these payments will receive an additional $500 for each under 17
- Direct payments will be distributed based on the adjusted gross income that’s reported on an individual’s or couple’s tax returns, broken down as follows:
- Most adults making less than an adjusted gross income of $75,000 annually will receive a $1,200 one-time payment. Payments will go out to individuals whose income is as much as $99,000, but those bringing in more than $75,000 won’t receive the full amount.
- Married couples without children will receive a total of $2,400 if their joint income is less than $150,000 annually. Payments will go out to those couples whose income is as much as $198,000, but those bringing in more than $150,000 won’t receive the full amount.
- Households with children will also receive $500 each for each child if the parent’s income qualifies for these payments and if the child is under the age of 17.
- Single parents who have filed as “head of household” in the past will receive the $1,200 if their income is less than $112,500. Payments will go out to single parents making as much as $136,500 with no children under 17, but those making over $112,500 will not receive the full amount.
- To receive the $500 per child payment, each child must have a Social Security number. An individual taxpayer identification number, which is used by nonresident aliens and others, is not enough.
- Adults who were claimed as dependents and people who do not have a Social Security number generally are not eligible.
- Unfortunately, people who are undocumented are also not eligible for stimulus checks.
Getting your check
- If you filed tax returns in 2018 or 2019, you don’t have to apply for the stimulus check. If the IRS already has your direct deposit information, the money will be dispensed to you electronically within the next few weeks.
- In most cases if you don’t regularly file tax returns, you will need to file a simple tax return with basic information such as: filing status, number of dependents, and direct deposit bank information. The IRS has provided a simple online form at https://www.irs.gov/coronavirus/economic-impact-payments. You will not need a W-2 or 1099 to file a simple tax return.
- If you currently receive Social Security benefits and do not regularly file tax returns, you will not need to fill out any additional forms to receive your stimulus payment, it will be deposited automatically into your bank account.
- The IRS will send you your check if they do not have your direct deposit information. Those checks are expected to take up to five months to arrive. In the coming weeks, the U.S. Treasury Department plans to create an online portal to allow people to enter their direct deposit information. Again, we will let you know when it is available.
- If you do not have a bank to set up direct deposit, you can use the UDW U.S. Bank Focus Card. It is a pre-paid debit Mastercard which allows you to receive direct deposit as well as shop online and use anywhere that debit Mastercard is accepted. Find out more about the Focus Card here: http://www.udwa.org/2017/11/new-benefit-udw-members-udw-u-s-bank-focus-card/
Please note: this material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor or accountant. All decisions regarding the tax implications of this information should be made with the consultation of your independent tax advisor.