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9 Questions Answered About Your Stimulus Check

Updated April 7, 2020 with information regarding stimulus check mailing dates. 

Updated April 15, 2020 with information regarding the IRS website stimulus check status.

The US government may soon be sending you money in the form of a “stimulus check,” designed to provide some relief to those who have taken a financial hit from the shutdown over the Coronavirus pandemic. As of April 1, the final authorized payments are for one check only. A group of Democratic senators proposed quarterly checks until the crisis is over, but the law ultimately signed by the president provides just one single payment.

Congress has pushed this through with lightning speed, and so it’s likely you have some questions about what to expect. Here are answers to a few questions that we’ve gotten over the past couple of days.

1. How much money can I expect to receive, and when will I get it?

The simplest answer is that almost every adult will receive a $1,200 check, but in reality, that’s only the base amount. Yours might be a lot higher or lower, depending on your situation.

The amounts paid will begin to phase out at $75,000 of adjusted gross income (AGI) if you’re a single filer, or $150,000 if you’re a married couple and file a joint tax return. If you claim head-of-household, that amount is $112,500. The IRS will find this information from your 2019 tax return, or, if you haven’t filed yet for 2019, they’ll use your 2018 return. Single adults who make more than $99,000 of AGI and married couples who earn more than $198,000 won’t receive stimulus checks.

If you do qualify for a payment, to calculate how much you’ll get, start with the $1,200 number. If you’re married and filed a joint tax return, you’ll get $1,200 each for a total of $2,400. Add an additional $500 for each child you have who qualifies for the child tax credit (they have to be 16 years old or younger). So a married couple filing jointly with three qualifying children could receive as much as $3,900.

The IRS has been instructed to send the money “as rapidly as possible,” but because of the current pandemic, along with recent cuts made to the IRS staff, some payments will take longer to send than others. When stimulus checks were sent back in 2008, it took seven or eight weeks for them to be processed and sent, and that was with a fully-staffed IRS. It’s unlikely that it will take quite that long this time, but nobody will know for sure until the first payments are processed.

[Update: April 7, 2020] The most optimistic projections were to have the checks begin to go out sometime in mid-April, and will go to Americans who filed tax returns in the past two years and whose payment details are already on record. Others may have to wait at least two months.

On the optimistic side, though, because the vast majority of taxpayers now have their refunds deposited directly into their bank accounts, the IRS already has the banking information they need in order to make electronic payments to a large number of people. This takes far less time than it does to print and mail a paper check. If you authorized a direct deposit at any point after 2017, the agency will try to make an electronic payment for you. There are also plans for a web-based portal at IRS where you can provide all of your bank information.

[Update: April 15, 2020] Payments have begun going out already to certain individuals whose information is already in the IRS direct deposit database.  To see the status of your stimulus payment, IRS has established a website: https://www.irs.gov/coronavirus/get-my-payment. You’ll need some basic information, such as your Social Security number, birthdate, and street address.

2. Will I have to pay back the stimulus check?

No. The payment has been set up as a refundable credit against your 2020 tax liability, and are technically paid out as advanced refunds. Individuals do not need to wait until the next tax filing season (which starts January 2021) to get the rebate. That means you don’t have to wait to file your 2020 taxes to get the money. It also doesn’t reduce any refund you would otherwise receive. In fact, even if you don’t qualify for the stimulus check now based on your tax returns from 2018 or 2019, you may still qualify for the tax credit next year when you file your 2020 taxes if your income meets the thresholds.

3. What if I didn’t file a tax return in 2018 or 2019?

The IRS announced on April 1 that Social Security recipients who did not file a tax return for tax years 2018 or 2019 would no longer need to submit additional paperwork such as a “simple” tax return in order to receive a stimulus payment. The IRS says it will instead use the information that they have on file in benefit statements for Social Security recipients (Form SSA-1099) to generate the $1,200 stimulus payments for those who didn’t file tax returns for 2018 or 2019. Payments will be issued as a direct deposit or by paper check, in exactly the same way as that beneficiary would normally receive their Social Security benefits. The vast majority of beneficiaries receive benefits by direct deposit.

4. Will this stimulus payment be taxable later?

No. As mentioned above, the check you’ll be getting is technically an advanced payment of a tax credit for the 2020 tax year. Thus, it won’t be included in your taxable income.

5. What happens if I had a child in 2019, but I haven’t yet filed my 2019 return? Do I lose the $500 child payment?

Your concern is that you’ll miss out on $500 because the IRS doesn’t know about your new child. That could be a temporary problem, because you wouldn’t get that extra $500 if you don’t file your 2019 return before the IRS starts processing your payment. But the good news is that if you have a child now that wasn’t reflected on your 2018 return, you’ll be able to account for that child next year when you file your 2020 (you’ll get an extra $500 credit then). So you’ll simply get it later. In fact, if your stimulus check is less than what you’re entitled to receive for any reason, you’ll be able to make up the difference with an extra tax credit on your 2020 return.

6. If my child turned 17 in 2019 making her ineligible for the $500, but I haven’t yet filed my 2019 return, will I still get to keep that additional amount?

That’s still something of an open question. The IRS will likely know your child’s current age based on your 2018 tax return (they can just add a year), so they may simply adjust your stimulus check accordingly. But back in 2008, if your stimulus check amount was too much, there was no mechanism available back then to pay back the extra money. So which way will the IRS go this time around? We’ll see.

7. What about young adults who live with their parents? Will they get a check?

If they can be claimed as a dependent on someone else’s tax return (whether or not they actually are claimed as a dependent), they will not receive a stimulus check; nor can they claim the tax credit on their 2020 return. So children who are living at home who are 17 or 18 years old, or college students who are 23 or younger at the end of the year who don’t pay at least half of their own expenses, will not get a check. There are also other dependents who won’t receive stimulus payments, such as an elderly parent or other relative living with you.

8. What if I owe back taxes?

As of April 1, the law says that stimulus money is generally not subject to reduction or offset to pay back taxes or other debts owed to the federal government. It’s unclear whether late alimony or child support payments could affect the amount you receive, but that could be an issue.

9. How will I know if my check has been sent?

The IRS will mail you a notice within 15 days of sending your check (or directly depositing it into your bank account) indicating the method of payment, the amount of the payment, and an IRS phone number to call if you didn’t receive it. The notice and the paper check (if that’s your method of payment) will both be mailed to your last known address the IRS has on file. If you recently moved, and the IRS doesn’t yet know about it, you need to file a Form 8822 with the IRS along with a change of address notice with the US Postal Service. That way, all correspondence and payments from the IRS will be sent to your new address.

Important Information

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

The information provided is based on current laws, which are subject to change at any time. Lucia Capital Group is not affiliated with or endorsed by the Social Security Administration or any government agency.

Social Security rules can be complex. For more information about Social Security benefits, visit the SSA website at www.ssa.gov, or call (800) 772-1213 to speak with an SSA representative.

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