Economic Impact Payment – Who Can Get It?
- June 1, 2020
- 5 min read
- 204 reads
The CARES act is the 2 trillion dollar stimulus bill is the most significant emergency aid package in the history of America. It sounds like a lot of money, but what does that look like once distributed to the American people?
The personal cash flow crisis caused by the pandemic is beyond what anyone expected. There is relief in knowing that the government is stepping up to aid the nation in many ways.
One of those ways is through the Economic Impact Payment. Tens of millions of households financially effected by the COVID-19 pandemic will receive a one-time payment through the IRS. This is part of the CARES act to assist with the economic hardship households are experiencing.
This is the most significant economic aid response in the history of our country. If you are eligible for economic impact payment, you can expect a bank deposit or check in the mail soon.
The IRS has already started distributing payments into the taxpayer’s bank accounts. The exact time of when you will get your aid will be determined by factors such as income and the method of payment.
Who is Eligible for the Economic Impact Payment?
Every tax-paying resident with a work-eligible Social Security Number will receive an Economic Impact Payment as long as their gross income does not exceed the threshold.
Individuals who are not dependent on another taxpayer will receive $1200 for income up to $75,000.
If you are the head of a single income household with dependants, that income level is raised to $112,500. Any earnings under that will still entitle you to the full $1200.
For married couples who file together, the economic impact payment will be capped at $2400 per household. The couple’s total household earnings cannot exceed $150,000 to receive the full amount and cannot be dependent of another taxpayer.
The IRS will base your earnings on your 2018 and 2019 tax returns. If you have not filed your 2019 tax return, they will base their decision off 2018 alone.
The IRS has moved the federal tax deadline to July 15 however it is beneficial to file your 2019 taxes as soon as possible to get the correct economic impact payment.
What If I Earn More Than the Threshold?
If your 2018 and or 2019 income tax filings exceed the threshold, then you may be eligible for a reduced Economic Impact Payment.
Individuals with no dependents who earn between $75,000 – $99,000 who are single or married filing separately the payment amount of $1200 is reduced by $5 for each $100 earnt over the threshold.
The same applies to single income heads of households who earn over the $112,500. If they earn between $112,500 – $136,500 their payment of $1200 is reduced by $5 for every $100 earnt over $112,500.
Married couples filing jointly who earn over the $150,000 threshold will still receive an Economic Impact payment. Their payment amount of $2400 will be reduced by $5 for every $100 earnt up to $198,000.
If you file for dependents, you can be eligible for another $500 per child d up to the specified threshold.
The amount of the reduced payment will be based upon the taxpayer’s specific adjusted gross income.
What About Everyone Else?
Many do not fall into the above category. What about retirees and those on veteran benefits?
The IRS says that those that do not earn enough to file a tax return will be eligible for the payment. Along with others that will be eligible are retirees, including railroad retirement, those on veteran benefits, and disability benefits.
- Individuals who earn up to $75,000
- Head of Household Taxpayers who earn up to $112,500
- Married couples who file individually who earn up to $75,000
- Married Couples who file jointly who earn up to $150,000
- Recipients of Social Security
- Railroad Retirement
- Disability Benefits
- Veteran benefits
- Taxpayers who earn less than needed to file for a tax return
- Supplemental Security Income Beneficiaries
Who Can’t Get It?
There will be some that will not receive the Economic Impact Payment due to earning over the threshold.
- Individuals who earn over $99,000
- Head of Household Taxpayers who earn over $136,500
- Married couples who file individually who earn over $99,000
- Married Couples who file jointly who earn over $198,000
The other reasons that someone is not eligible is if they are a non-resident, or do not have a valid Social Security number.
- If they are already claimed as a dependent on someone else’s tax return, such as a child, student or an older dependent.
- If an individual’s 2019 tax filing included filling out the following forms, they would most likely not be eligible for the payment. Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS
How Do I Get The Money?
For those that have filed a 2018 and or 2019 tax return, you don’t need to do anything.
The IRS will use that information to calculate your eligibility and the amount payable.
If you have not filed your 2019 tax return but have filed your 2018 federal tax return, then the IRS will use this information to determine your eligibility.
If you earnt less in 2019, it would be beneficial to file your federal tax return asap.
If you are not required to file a tax return, then the IRS will use the information from Forms SSA-1099 and Form RRB-1099 to determine your eligibility.
All Economic Impact Payments will be either deposited into your bank account or through a paper check.
The IRS will send out a letter confirming your payment within 15 days after the payment has been processed.
You do not need to contact the IRS if you have not received your payment yet. They have only just begun distributing payments and will continue to do so over the coming weeks.
Now is the time that scammers may attempt identity theft. Remember the IRS will not call you so do not give out any personal information over the phone if someone calls. You do not need to do anything to get the economic impact payment. The IRS will process it automatically.
Coronavirus pandemic has hit the globe faster and harder than anticipated. The results are an economic downturn no country will escape. The world may not look the same in the wake of COVID but we will overcome this. The 2 trillion dollar CARE act is a great step in the right direction to protect our nation’s economy.
We want to hear from you. How has COVID-19 financially impacted your household?