The CARES act is an economic recovery package that was passed by congress to address the unprecedented disruption to our economy by the current pandemic. Part of this bill is an immediate stimulus check that is going out to most Americans to help with bills and spending during this difficult time. The payments will be:
- $1,200 for each adult and $500 for each child under the age of 17 claimed on your tax return. If you have a dependent 17 or older, neither you nor they will get a check as the law was written.
- Subject to a phaseout at $75,000 income level per adult or $112,500 for heads of household. ($150,000 for married couples)
- An advance tax credit and NOT taxable income in any way.
- Sent by direct deposit or mail based on your 2019 tax return (or 2018 if you haven’t filed yet). Mail payments may take much longer to receive.
- NOT affected if you currently owe the IRS money from past years. There are no offsets based on back tax liabilities.
- Reconciled on your 2020 tax return so that some may get more money if their situations changed from past years. Those who get too much payment may not have to pay it back.
Payments are supposed to go out in early April and include people who are non-filers including Social Security, disability, and SSI recipients. If you have moved since filing your last return you may want to file your 2019 return soon, or mail in IRS form 8822 to update your address.
We expect to see a lot of scams and misinformation about these checks. The IRS will never call or email you about this. They will send out letters to verify you are living at the same address as when you filed. There is nothing you need to do to receive the checks otherwise. If you don’t get all that you are entitled to, the rest would be due when you file your taxes in 2020.
For more timely information, go to www.IRS.gov/Coronavirus .