The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides several measures to help individual taxpayers with monetary stress during this period of economic crisis. One of the biggest pieces is the Economic Impact Payments, better known as Individual Stimulus Payments or Rebate Checks, which are being sent to taxpayers over the next several months.
The amount of your check is based on your 2019 return if you’ve already filed and based on your 2018 return if you have not. The following includes the amounts you can expect, based on annual adjusted gross income levels:
- $1,200 for an individual who made less than $75,000.
- $2,400 for a couple Married Filing Joint who together made less than $150,000.
- An additional $500 for each child under the age of 17.
- A phase out on the rebate of $5 for every additional $100 of income (so if you are an individual who filed a return showing that you made $80,000 in 2019, your rebate check is reduced to $1,150).
- No money once you made over $99,000 as and individual and over $198,000 as a couple.
Getting Your Rebate
These rebate checks are being sent automatically to bank accounts. However, getting your rebate as quickly as possible is dependent on two things: 1. Did you file a return in 2019 or 2018? And 2. Did you include bank account information?
If you did not file in 2018/2019: If your income was under $12,200 for an individual or under $24,400 for a couple, you were not required to file in 2018 or 2019. You are still eligible to receive this rebate, but you will have to submit a short-form in order to get it. Click this link to enter your Non-Filer Payment Information. Those who did not file but receive Social Security, Railroad Retirement, or SSDI benefits will automatically get their Payment.
You did not include bank account information on your return: Paper checks are going to be mailed, but it could be a while before you receive it. The government will begin mailing about 5 million paper checks per week starting on April 24th. They will start by sending to lowest income amounts – from $0-$10,000. The next week, May 1st, checks will be sent to those in the $10,001-$20,000 bracket. Checks will continue to be sent through September until everyone has received their rebate. It looks like the IRS is trying to set up a portal for you to enter bank account information, but the link is not working yet. You should regularly check back here to be able to update your bank information.
No Repayment of the Rebate
The amount you receive is a credit. It is not an advance of your 2020 refund, and it is not income you will have to pay taxes on when you file next year. However, even though the IRS is basing your rebate amount on 2019 or 2018, it’s meant to be based on 2020 income.
If you get a reduced rebate, you will get the money back next year. For example, if your 2019 taxes show that you made $80,000, your recovery rebate check will be reduced to $1,150 but if you end up making less than $75,000 this year (regardless if it’s because of COVID-19) you will receive the $50 as a credit when you file your 2020 return.
If you get more money, the CARES Act does not currently require you to pay it back. For example, if your 2019 taxes show that you made $74,000, but you end up making $80,000 in 2020, you will not owe the $50.
Please contact us at Avizo Group if you have questions or want clarification on these rebates, or any other programs put in place to benefit you during this time.