Economic Stimulus Payments to Tax Filers Impacted by Coronavirus
At the end of March, the Treasury Department and the Internal Revenue Service announced plans to distribute funds to assist filers whose finances have been negatively impacted by the Coronavirus outbreak. The target distribution date is set for some time in mid-April. Nothing is required of most individuals who meet the guidelines for the assistance. However, our tax attorneys have learned that individuals who generally do not file returns will be required to present a basic tax return in order to receive their payments.
Economic Impact Payment Eligibility
According to the Internal Revenue Service, the guidelines for receiving a stimulus payment are as follows:
Taxpayers with an adjusted gross income of up to $150,000 for married couples filing jointly and up to $75,000 for individuals can expect to receive $1,200 each. This means $2,400 per married couple and $1,200 per single filer. An additional $500 for each qualifying child will also be added to the payment.
Taxpayers with income over the amounts mentioned above may still receive a stimulus payment, but the amount will be reduced. Married couples with no children who have an annual income over $198,000 and singles with a yearly income of over $99,000 do not qualify for the program.
Filers who are eligible for the economic impact payment are those who have submitted tax returns for 2018 or 2019. Such individuals will receive the funds automatically, provided they have supplied the IRS with a valid bank account set up for direct deposit.
Most individuals need not take any special action to receive their checks. Rather, the IRS calculates and sends the payments automatically to those who are eligible. Payments are calculated based on the most recent tax return the IRS has on record. The payment amount for individuals who have not yet filed will be calculated based on their 2018 tax return. Payments are deposited directly into the same bank account filers used to receive their tax refund.
How to Submit Direct Deposit Information
If the IRS does not have your direct deposit information, the check may be delayed. However, there are things you can do to get your payment as soon as possible, as opposed to waiting for a paper check to be mailed. For example, the Treasury Department has plans to create an Internet-based portal for filers to submit their banking information to the IRS.
Social Security Recipients and Retired Railroad Workers
Individuals on Social Security or retired railroad workers who are not required to file taxes each year will receive their payments without having to contact the IRS. The IRS will use the same bank account used to pay Social Security benefits to such individuals, and they will have their payments deposited directly into that account. However, because the IRS does not have data on hand concerning the number of dependents such individuals may have, each person would simply receive $1,200, with no additional money for dependents. If this changes, there will be another announcement.
Receiving Payment If a Return Has not Been Filed
Individuals are urged to file a tax return as soon as possible to avoid having their economic impact payments delayed. Direct deposit information must be included on the return. This is the fastest way to obtain the funds.
Those who use accountants or visit community organizations for help with their taxes should be aware that the economic impact payments are available throughout the remainder of 2020, and therefore their funds will not “expire.” Nevertheless, those who are in critical need of the stimulus checks should file as soon as possible. More information is available at IRS.gov/coronavirus, and updated information can be obtained from tax attorneys or at the aforementioned website.