[Latest Update based on IRS news release] The $2 trillion dollar stimulus bill (CARES act) has now been agreed to in Congress and signed into law. Under this bill there is the widely reported economic stimulus payment checks of $1,200 per adult and $2400 for couples. For families they would provide $500 for every eligible child. The full stimulus check would be made to those earning less than $75,000 ($150,000 for couples) and would phase out to zero for those earning more than $99,000 ($198,000 for couples). Head of household tax filers will get the full payment if they earned $112,500 or less.
In the phase out range (i.e. between $75,000 and $99,000 for singles) for every $100 you earn above the lower limit ($75,000) payment drops by $5 until you reach the maximum limit ($99,000).
Example (single) – If Brian made $67,000 last year based on his latest filed tax return, he would get the full $1200 payment. If he had made $90,000 he would only be eligible for $450 ($1200 – $750). If he had made $110,000 he wouldn’t be eligible at all.
Example (married) – My wife and I made $185000. We filed jointly. Are we eligible to get anything from the 2020 stimulus? Answer – You would be eligible to get $650.00 (partial amount) under the direct payment program. Up to 150,000, you get 100% of the $2,400 stimulus payment. Anything over 150,000, you would subtract 5% of the amount over 150k. So in your scenario, 35k over 150k. 5% of 35k is $1750, So $2400- $1750=$650.00
What about those with low or no income or on Social Security or Disability?
Families or those with no earned income or no federal income tax liability would still be eligible for a minimum payment of $600. Those on disability and social security will also be eligible for the stimulus payments, as long as their total income does not exceed the eligibility income limits above. The government will use the latest SSA-1099 form (the Social Security benefit statement) to confirm eligibility and send them a payment via the usual way they get their current Social Security benefits.
How will the Stimulus check payments be made by the IRS?
[IRS Updates] – The IRS has confirmed that payments for most working Americans are expected to be calculated and deposited or mailed via check based on 2018 or 2019 federal tax filing payment details. Most people won’t need to take any action and the IRS will calculate and automatically send the economic stimulus payment to those eligible.
For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed. So if your 2018 information is out of date or your income situation changed in 2019, make sure you file, even if you have no taxes due (start filing for free with TurboTax).
The Treasury also announced that SSI or SSDI beneficiaries who typically do not file a tax return will automatically get the $1,200 payment, unlike other workers who have to have a recent filing to get the stimulus payment.
When will the 2020 stimulus payments be made? Stimulus Check Payout Schedule
The IRS has confirmed that the distribution of economic impact payments (stimulus checks) will begin by mid-April. Note that this will likely only apply to those receiving the payment via direct deposit (in line with how they get their tax refund or Social security check today)
- Direct Deposit payments will generally be deposited 2 to 3 days after the IRS confirms income eligibility for the payout.
- Physical checks will take at least 6 to 8 weeks to be mailed out.
Social Security and Disability recipients who are eligible for the payment will get the stimulus checks/payments deposited the same way they currently get SSI and SSDI payments.
Given over 120 million Americans could be eligible for the payment, it will take a while to process the stimulus checks.
Official IRS status on payment of Stimulus payment checks: The IRS has said the distribution of economic impact payments (stimulus checks) will begin my mid-April and will be distributed automatically, with no action required for most people. Social Security beneficiaries who are not typically required to file tax returns will not need to file to receive a payment. Instead, payments will be automatically deposited into their bank accounts. However, some people who typically do not file returns will need to submit a simple tax return to receive the economic impact payments. You won’t get more information by calling the IRS about this either.
So in the mean time, if you haven’t already make sure you file your tax return (deadline extended to July 15, 2020) to ensure you get the 2020 stimulus check payment in addition to the extended and additional UI benefits. You can file for free at Turbotax, E-file.com and even at the IRS if you make below certain income limits.IRS.gov
How will child support arrears be impacted with stimulus check
I seem to be getting a lot of comments on this question around child support. While the Office of Child Support Enforcement (OCSE) in the U.S. Health & Human Services Administration hasn’t yet released specifics, it does appear likely that the stimulus payments would be subject to interception for past-due child support. In fact Iowa Senator Chuck Grassley, one of the CARES Act co-sponsors, said “those who have past due child support payments that the states have reported to the Treasury Department” will not get a check. This is because a court order for child support continues until it is modified or terminated. Similarly with unemployment compensation stimulus increases, your child support may be withheld from the UI payments.
Updating Direct Deposit Information
This question has come up a lot in the hundreds of comments to this article. The IRS has confirmed that the Treasury plans to setup a website and app for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail. I will add the link to that website when available – but please be aware of scams trying to get your payment information.
Leave a comment below on whether this check will make a meaningful difference or if you have any questions. You can also share your story and see others who are keenly waiting for their stimulus check.
[February 2020 update – prior to stimulus bill being passed] President Trump is pushing congress to approve immediate cash payments to millions of Americans who have been hit hard by the coronavirus and its associated economic fallout. This is part of the overall economic stimulus package under consideration and is aimed at providing an immediate financial boost to those Americans who may have lost a job or at high risk of losing it.
Cash payments could range from $800-$2000 based on several different options. A $1000 payment has already been proposed by Senator Mitt Romney. These cash stimulus payments would be done via direct payments (2 weeks from when Bill is approved) with likely no repayment obligation. Rules will be attached to ensure that these payments only go to those who need it but this is a fast moving situation and more details are still to come.
Recent reports suggest the payment will consist of two rounds of direct payments to taxpayers. The first round of checks could be mailed by April 6, and the second on May 18. It will base payments on income level and family size, according to reports.