Here is everything you need to know about how the stimulus check will impact you if you are going through a transition in life such as divorce, custody battles, and more…
How Much Will I Receive?
The government’s recent stimulus relief bill provides for a one-time payment to Americans. The payments are up to $1,200.00 per individual and $500.00 per qualifying child. The stimulus checks are subject to income limits. The higher your adjusted gross income, the less you will receive. Individuals earning up to $75,000.00 per year, are entitled to the full $1,200.00 payment plus an additional $500.00 per child. Married couples filing jointly earning up to $150,000.00 are entitled to $2,400.00 as a couple plus an additional $500.00 per child. Head of household filers earning up to $112,500.00 is entitled to the full $1,200.00 payment plus an additional $500.00 per child.
Therefore, a qualifying family of four would be entitled to up to $3,400.00. For every $100.00 earned in excess of the thresholds stated above, the payment is reduced by $500.00. The stimulus payments for individuals, heads of households, and joint filers will completely phase out at adjusted gross incomes of $99,000.00, $136,500.00, and $198,000.00, respectively.
How does the Government Calculate the payment amounts?
To make its determination, the IRS is using information from 2019 tax returns. If individuals have not filed their 2019 tax returns, the IRS will use 2018 tax returns. Seniors who receive social security and don’t file tax returns will also be entitled to a stimulus check. The IRS will rely on SSA-1099s to send stimulus payments to those individuals. You can determine the amount of your stimulus check with the calculator provided by the Washington Post.
When Will I get the Stimulus Money?
The payments should start to be delivered on April 9, 2020. The IRS will be directly depositing the stimulus checks to people using the bank account information on file with the IRS. If you do not have the stimulus check directly deposited, a check will be issued and sent in the mail, which will cause a significant delay in the receipt of the funds. In the coming weeks, the Treasury plans to develop a portal 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.
Will I owe any money back to the Government?
Even if you qualify base on last year’s return, and you earn more in 2020, you should not owe the money back. Conversely, if you don’t qualify for the entire amount based on 2019 or 2018, and your income drops in 2020, you will be entitled to any remaining amount you qualify for in 2020. It is a fully refundable credit to offset your federal income taxes from your 2020 tax return filed in 2021. This means that you receive the full benefit of the tax credit, even if you do not have any tax liability to offset.
Are the Stimulus payments taxable?
The stimulus checks are not taxable. Even if you have outstanding past due taxes, you will receive a stimulus check if you qualify. However, individuals who have outstanding past-due child support will not receive a stimulus check. (Check with your CPA, we aren’t accountants – we are relaying the information reported here).
The IRS has posted additional information here.
(Written by Partner Michael R. Hudzik).