Individual COVID-19 Stimulus Rebate Payment
The Coronavirus Aid, Relief, and Economic Security Act was signed by President Trump on March 27, 2020. As part of this new law, stimulus rebate payments will soon be getting sent to most individuals.
Taxpayers are eligible for a rebate payment equal to the sum of $1,200 ($2,400 for joint returns) plus $500 for each qualifying child under age 17. Individuals with no income or no taxable income are still eligible for the payment. Taxpayers who can be claimed as a dependent on someone else’s return are not eligible, even if the parent choose not to claim the child but would have been allowed to do so.
The amount of the stimulus check will be reduced once adjusted gross income gets too high. The phase out begins as follows: (1) $150,000 married joint filers, (2) $112,500 head of household, and (3) $75,000 for all other taxpayers. No stimulus payment will be made once a taxpayer’s adjusted gross income exceeds (1) $198,000 joint, (2) $146,500 head of household, and (3) $99,000 single.
Taxpayers do not need to sign up to receive the rebate check. Instead, the IRS will use the 2019 tax returns (2018 if the taxpayer hasn’t filed 2019 yet) to determine how much money will be sent to each taxpayer.
The amount of the rebate will be re-figured with the 2020 tax return based on the filing status, number of children, and income for that year. If the actual credit calculated on the 2020 return is higher than the advance rebate, the taxpayer will be able to claim the additional amount when filing the 2020 return, which will increase the refund or offset any balance due. If, on the other hand, the advance rebate received was greater than the credit to which the taxpayer is entitled, the taxpayer won’t have to pay back the excess.
The IRS may pay the refund via direct deposit to the account the taxpayer used for other federal tax refunds on or after January 1, 2018. Within 15 days of making a rebate payment via direct deposit, the IRS must mail a notice to the taxpayer’s last known address indicating how the payment was made.
Treasury Secretary Steven Mnuchin said he expects most people will get their payments within three weeks.
Contact your Copeland Buhl representative if you have questions regarding the stimulus rebate payments.