The $1,200 Direct Checks, Explained
🚨 If you haven't filed your taxes in 2018 or 2019, file them ASAP
You must file your 2018 or 2019 taxes to be able to receive the direct payment.
How much will the payments be?
Individuals who earn $75,000 in adjusted gross income or less would get direct payments $1,200 each. For every qualifying child age 16 or under, the payment will be an additional $500.
It phases out entirely at $99,000 for singles and $198,000 for couples without children.
Washington Post has an easy calculator here.
How will the IRS know where to send my payment?
The majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed. (Source: IRS)
When will you get it?
President Trump and Treasury Secretary Mnuchin are still pushing to get the direct payments issued by April 6. Many experts think it will be most likely 2-3 months to receive the direct payments. You can check your payment status on the IRS site.
Will I have to pay back any amount if my income increases?
No. If the credit amount you qualify based on 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back. (Source: grassley.senate.gov)
Do I have to pay income taxes on the amount of my payment?
No. Stimulus checks are not subject to income tax, they are being treated as an advance tax credit.
What if my income was above the threshold in 2019, but I’ve lost my job due to the coronavirus? Can I still get a rebate check?
If your income in 2019 was in the phase-out range you would still receive a partial rebate based on your 2019 tax return. However, the rebate is actually an advance on a tax credit that you may claim on your 2020 tax return. If your income is lower in 2020 than in 2019, any additional credit you are eligible for will be refunded or reduce your tax liability when you file your 2020 tax return next year. (Source: grassley.senate.gov)
Who is not eligible?
According to the IRS website, taxpayers likely won't qualify if any of the following apply:
1. Your adjusted gross income is greater than
$99,000 if your filing status was single or married filing separately
$136,500 for head of household
$198,000 if your filing status was married filing jointly
2. You can be claimed as a dependent on someone else’s return. For example, this would include a child, student or older dependent who can be claimed on a parent’s return.
3. You do not have a valid Social Security number.
4. You are a nonresident alien.
5. You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.
🛑 Watch out for scams!
The IRS urges taxpayers to be on the lookout for scam artists trying to use the economic impact payments as cover for schemes to steal personal information and money.
Remember, the IRS will not call, text you, email you or contact you on social media asking for personal or bank account information – even related to the economic impact payments. Also, watch out for emails with attachments or links claiming to have special information about economic impact payments or refunds.
Where can I get more information?
IRS updates irs.gov/coronavirus
Latest IRS announcement: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
Senator Grassley's FAQ: https://www.grassley.senate.gov/news/news-releases/cares-act-recovery-check-faq
Additional Sources: CNN, NYTimes and Washington Post