The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes extensive provisions for providing massive fiscal relief to not just businesses, but individual Americans. One of the most immediate forms of relief comes by cutting direct checks to many Americans. For details and stipulations of these relief checks, check out our CARES Act overview here.
Nearly 90 million of the 150 million Americans eligible for stimulus money received their payment by April 17, 2020, according to the government’s latest numbers.
The IRS started by sending money to the people it could reach the fastest. This was anyone who had direct deposit information already on file with the agency because they were due a refund on either their 2018 or 2019 federal tax returns. But even some Americans who did not have their banking information on file have already received a paper check in the mail. The IRS began sending those out last week, starting with lower-income individuals.
The IRS has an online tool that allows users to input bank account information, but only if the agency does not already have a bank account on file from a 2018 or 2019 tax return and it has not yet processed the individual’s stimulus payment.
Does a taxpayer who has filed a tax return for 2019 or 2018 need to do anything?
No additional action is needed by taxpayers who:
- have already filed their tax return for 2019. The IRS will use this information to calculate the payment amount.
- have not filed their 2019 tax return yet but have filed a 2018 tax return. For these taxpayers, the IRS will use the information from their 2018 tax filings to calculate their relief check.
When will the money arrive?
Payments started arriving in bank accounts the week of April 13, 2020, and a second wave of payments started coming the week of April 27, 2020. The government will be able to move fastest for people who have filed 2019 tax returns with direct-deposit information but will take significantly longer for those who will need paper checks.
Is there a way to give the IRS my bank account information to speed up my payment?
The IRS has now added the “Get My Payment” function to their website that will allow people to check the status of their payments and provide banking information for direct deposit instead of paper relief checks. Direct Deposit can accelerate the payment by weeks or months since the government can only print about five million checks a week.
What if I’ve been having problems with “Get My Payment”?
On April 26, the IRS announced it made several improvements to the system. Those updates included fixing a problem with taxpayers not being able to access the system if they did not receive a refund or owe taxes with their most recent tax return. Now, those individuals can input zero for their tax liability. Taxpayers who had their refunds applied to estimated taxes can enter the total refund from line 21a of the 2019 return or line 20a of the 2018 return.
How soon after deposit information is entered will payments come?
Anyone who enters information before noon on a Tuesday should see their status update by the following Saturday. The payment would then likely be deposited within a few days after the confirmation.
If I am a Social Security recipient who doesn’t file a tax return, how and when will the payment come?
The payments will be made in the same way their Social Security benefits are paid. Those payments should have arrived by April 29, according to the Treasury Department.
What about individuals who receive veteran’s benefits or Supplemental Security Income but not Social Security?
SSI recipients will get the payments automatically by early May in the same way they receive their usual benefits. Those with qualifying children will need to use the IRS website to provide information about their children to get the additional $500 relief. This information must be entered by May 5, 2020, to get the additional payments for children; otherwise, they will have to wait until their 2020 tax returns are filed next year. The payments will not affect SSI eligibility.
Veterans and their beneficiaries who receive benefit payments will receive the stimulus payments automatically without additional paperwork. They also have until May 5, 2020, to add qualifying children.
Are the payments taxable income?
No. The relief payments will not be considered income.
What about people who owe money to the IRS for prior years?
Other IRS liabilities will not be deducted from the relief payments. Even taxpayers who owe back taxes should get the full amount they qualify for.
Will children born in 2020 qualify for the payment?
Parents of children born this year will not get an advanced payment for that child. However, assuming the taxpayers qualify based on their 2020 income, the additional $500 would be added to their tax refund or subtracted from their income-tax bill when they file their 2020 tax returns.
Does someone who has died qualify for the payment?
No. A payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions in the Q&A about repayments. Return the entire payment unless the payment was made to joint filers and one spouse had not died before receipt of the payment, in which case, you only need to return the portion of the payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.
Does someone who is a resident alien qualify for the payment?
A person who is a nonresident alien in 2020 is not eligible for the payment. A person who is a qualifying resident alien with a valid SSN is eligible for the payment only if he or she is a qualifying resident alien in 2020 and could not be claimed as a dependent of another taxpayer for 2020. Aliens who received a payment but are not qualifying resident aliens for 2020 should return the payment to the IRS by following the instructions about repayments.
Payment recipients: Watch for IRS letter
For security reasons, the IRS plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is paid. The letter will provide information on the payment method and how to report any failure to receive the payment. If a taxpayer is unsure if they have received a legitimate letter, they can visit IRS.gov to learn how to protect themselves against scam artists.
My address is different from the last tax return I filed. Can I change it using “Get My Payment”? (updated April 26, 2020)
No. Get My Payment will not allow you to change your address. To change your address:
- If you have not filed your 2019 tax return, enter your new address on your return when you file. The IRS updates your records when your return is processed. Filing electronically will ensure your return will be processed more quickly.
- If you have filed your 2019 tax return and did not receive a refund via direct deposit, your payment will be mailed to the address the IRS has on file for you. This is generally the address on your most recent return or as updated through the United States Postal Service.
What if my 2018 income qualifies, but my 2019 income does not?
The IRS based the amount of your payment on the AGI listed in your most recently filed tax return, either 2018 or 2019. If you qualify based on your 2018 AGI, but not your 2019 AGI and you have not filed for 2019, it might be worthwhile to wait until you receive your stimulus check to file for 2019. You will not have to pay back the relief payment if you don’t qualify based on your 2019 AGI.
What if I make more money in 2020 and do not qualify for what I received? Do I have to pay it back?
The answer is no. Here’s an example. You’re an individual with no children who made $60,000 in 2019, therefore you qualify for the full stimulus check. In 2020, your income is $100,000, which puts you above the phase-out range. You are ineligible for the stimulus payment, however, you do not need to pay back the stimulus payment since it was based on either 2018 or 2019 income.
When will the IRS mail out paper relief checks?
The IRS is now sending paper relief checks and plans to send approximately 5 million paper checks each week. The IRS will send checks starting with taxpayers who have the lowest annual adjusted gross income as reported on their 2018 or 2019 tax return, whichever is more recent.
Here is the planned weekly schedule for the IRS to mail relief checks based on annual adjusted gross income. All dates represent the “week ending” (for example, the week ending April 24). Keep in mind that the IRS could change this schedule at any time.
- Less than $10,000: April 24
- $10,001-$20,000: May 1
- $20,001-$30,000: May 8
- $30,001-$40,000: May 15
- $40,001-$50,000: May 22
- $50,001-$60,000: May 29
- $60,001-$70,000: June 5
- $70,001-$80,000: June 12
- $80,001-$90,000: June 19
- $90,001-$100,000: June 26
- $100,001-$110,000: July 3
- $110,001-$120,000: July 10
- $120,001-$130,000: July 17
- $130,001-$140,000: July 24
- $140,001-$150,000: July 31
- $150,001-$160,000: August 7
- $160,001-$170,000: August 14
- $170,001-$180,000: August 21
- $180,001-$190,000: August 28
- $190,001-$198,000: September 4
- Remaining checks: September 11
We will continue to monitor and provide additional updates. However, if you have any questions, please contact your local Blue & Co. advisor.
Please continue to monitor our Coronavirus Resources and Information Page for updates.