The CARES Act, the biggest disaster assistance program in U.S. history with an unparalleled $2 trillion recovery plan, should bring relief to people, companies, and sectors who have been struggling hard during the coronavirus crisis in the last few weeks.
We will address the most popular concerns to help you fully grasp the stimulus payments.
Who will get money from the stimulus, and how big is the payment?
Most people will receive some money. You will need your Social Security number and not be a dependent. This IRS notice goes into detail more about who qualifies for the stimulus payment.
What about individuals on Social Security or not making an income?
You can qualify for a stimulus payment if your total income does not meet the income thresholds while you are on Social Security. That said, if you have a dependent, the IRS will not have any details, and the extra $500 for the dependent(s) would not be included in the payment. If you’re not on social insurance or don’t earn an income, you’re expected to file a tax return to get your stimulus payment.
If you have received an SSA-1099 (Social Security Compensation Statement) form, the federal government will send a check the same way you receive your Social Security check. People with disabilities are eligible for a payment.
Where do I get the money?
If you haven’t finished your 2018 tax return, you file as soon as possible to get the correct payment. Submitting today can help you make sure that your bank account and home address details are current and there’s no doubt where the money will be going.
If you did not submit your refund by the time the checks go out, the federal government will use your 2018 AGI to calculate the payment.
How would I get the payment?
The federal government wants to send payments through direct deposit to encourage social distancing and to have the money in the pockets of Americans as quickly as possible. Using direct deposit helps you get the payout even sooner.
However, other options are possible if you don’t have a direct deposit alternative. If required, they can mail paper checks.
Will I get a notice?
The Treasury will mail a notification to your last identified address. This should mention how the payment was made and the amount deposited.
If you do not receive one, the notice will contain a telephone number at the IRS. Keep the notice until you collect the payment.
Is the payment taxable?
No, it is not taxable.
Will this impact my refund for 2019?
No, the stimulus payments won’t affect your 2019 refund or influence your expected refund for 2020.
What if I owe money to the IRS from prior years?
It will not take any IRS liabilities out of the payment, including any back taxes. You will still receive the payment.
Traxion Tax is with you every step of the way to help you get the most accurate stimulus payments. Please visit the IRS’ Coronavirus Tax Relief page for the most up-to-date information.