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By now, we’re all eagerly anticipating our COVID-19 stimulus payments. With every update regarding the payments, we’re given a few answers, but it seems we finish reading with just as many questions. If you’re wondering how much you’ll receive as a result of the Coronavirus Aid, Relief, and Economic Security Act that was signed into law late last month, there’s an easy way to calculate your total and find answers to your other questions.
The amounts that will soon be provided to millions of Americans are much easier to determine than most of us thought they would be. As an individual, you should be receiving $1,200, depending on your income, but we’ll talk more about that later. Married couples who file their taxes jointly will receive $2,400, and an additional $500 will be provided per dependent child as long as they’re 16 or younger.
At a certain income level, individual filers will receive smaller amounts. If your adjusted gross income lands over $75,000 annually, your economic stimulus payment will be reduced by $5 for each $100 over the limit. Following this math, individual tax filers with an adjusted gross income of $99,000 and above will not receive the payment. For head-of-household filers, the reductions start at an adjusted gross income level of $112,500.
The math follows the same pattern for married couples filing jointly. In this case, the reduction starts at $150,000. Up to this point, you’d receive the full $2,400, but after that point, you’d see the same $5 reduction per $100 over the limit. So, a married couple without any children and an adjusted gross combined income of $198,000 wouldn’t receive the payment.
The coronavirus economic stimulus payments will be calculated based on 2019 taxes first. If you haven’t filed for 2019 (remember, you now have until July 15, 2020 to file your 2019 taxes), your 2018 return will be used instead. Many people who receive Social Security benefits for retirement or disabilities haven’t filed for either year because their income was too low for it to be a requirement. Fortunately, these individuals will still receive payments - they will just be based on information the IRS received via 2019 SSA-1099 and RRB-1099 forms instead.
This is one area of the act that has caused a lot of confusion. Under certain circumstances, 2020 tax returns (yes, next year’s tax return) may affect the payments. When you file your 2020 tax return next year, you’ll have the chance to recalculate the amount you should have received for the stimulus payment. For most people, the numbers will stay the same. But for others, they would have been eligible for a larger payment than they received based on their 2019 or 2018 tax returns.
If this is the case for you, you’ll be able to obtain the difference in the two amounts as a tax credit. However, since 2020 tax returns won’t be filed until next year, you’ll have to wait a while for that extra payment. Alternatively, you won’t have to worry about differences in your 2020 tax return reducing the amount you were given already.
If you received a 2018 or 2019 tax refund from the Internal Revenue Service (IRS) via direct deposit, that is how you’ll receive your economic stimulus payment now. For individuals with banking information on file with the IRS, you can expect to receive the funds within the next few weeks. If the IRS doesn’t have this information or you don’t have a bank account, you’ll receive a check in the mail. This process is a bit more detailed and may take up to two months.
However, just recently the IRS released a new web tool that can be used by non-filers. Non-filers include those who had gross income that did not exceed $12,200 in 2019 (this amount is $24,400 for married couples), or those who are otherwise not required to file a tax return. The web tool can be accessed via the IRS website, and non-filers should click on the tab on the homepage that reads - Non-Filers: Enter payment info here.