(CBS News) — The $2 trillion stimulus bill passed in the Senate includes help for American families who are hurting financially due to the economic impact of the coronavirus: $1,200 checks for most adults and $500 for each of their children.
The massive relief package will funnel $290 billion in direct payments to individuals and families. The measure isn’t over the line yet as the bill must now go the House, but households are expected to get a check within weeks or months.
That could provide a lifeline for the millions of Americans who have already been laid off or seen their income plunge as people hole up to avoid infection.
“Low-and middle-income households would receive about 68 percent of the payments,” noted Tax Policy Center senior fellow Howard Gleckman in a blog post.
Here’s what to know about how the payments will work, according to CBS News.
Who will get a $1,200 check?
The key factor is your household’s annual income, because the package is aimed at helping low- and moderate-income families. Some wealthier families might not receive a stimulus check.
- Individual taxpayers will get $1,200 each if their adjusted gross income (AGI) is less than $75,000.
- Individual taxpayers with AGIs above $75,000 will receive smaller checks, with a $5 reduction for every $100 in income above $75,000.
In other words, if your AGI is $80,000, your check would be reduced by $250 — the total payout would be about $950. To determine how much you’ll get, you can use this stimulus check calculator by OmniCalculator.
Middle-income households that earn between $51,000 to $91,000 would receive an average payment of about $1,810, or about 3% of their after-tax income, according to Gleckman.
What if I’m married or a head of household?
- Married couples will receive $2,400 if they earn less than $150,000 in adjusted gross income.
- Head of households will receive $1,200 if they earn less than $112,500 in AGI.
- Payments will be reduced by $5 for every $100 in income above those AGI limits.
How do I find my adjusted gross income?
Adjusted gross income reflects how much of your income is taxable after certain deductions, such as your retirement contributions. Here’s how to find your AGI:
- 2018 tax year: Line 7 on your Form 1040.
- 2019 tax year: Line 8b of your Form 1040.
Will children get a $500 check?
Yes. Taxpayers with dependent children will receive a $500 payment for each child, which isn’t determined by income. In other words, taxpayers will get a $500 payment for each of their children, regardless of how high their income is.
I haven’t filed my 2019 taxes yet. Does that matter?
No. The government will base its checks on either your 2019 or 2018 tax filing. If you haven’t filed your 2019 taxes yet — and many people haven’t, given the IRS has delayed its tax filing deadline from April 15 to July 15 — the government will use your 2018 tax returns to determine your stimulus payment.
I’m not required to file a tax return, what should I do?
If you don’t file taxes, use the “Non-Filers: Enter Your Payment Info Here” application to provide simple information so you can get your payment.
You should use this application if:
- You did not file a 2018 or 2019 federal income tax return because your gross income was under $12,200 ($24,400 for married couples). This includes people who had no income. Or
- You weren’t required to file a 2018 or 2019 federal income tax return for other reasons
If you receive these benefits, we already have your information and you will receive $1,200. Do not use this application if you receive:
- Social Security retirement, disability (SSDI), or survivor benefits
- Railroad Retirement and Survivor Benefits
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.
Is the rebate taxable or will I have to pay back any amount if the rebate based on my 2019 return is larger than what it would be if based on my 2020 tax year return?
No, the rebate is treated like other refundable tax credits, such as the child tax credit and earned income tax credit, and not considered income. Moreover, 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.
Are individuals with little to no income or those on means-tested federal benefits, such as SSI, eligible for a recovery rebate?
Yes, there is no qualifying income requirement. Even individuals with $0 of income are eligible for a rebate so long as they are not the dependent of another taxpayer and have a work-eligible SSN.
Are seniors whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment eligible?
Yes, as long as they are not the dependent of another taxpayer. The bill also provides IRS with additional tools to locate and provide rebates to low-income seniors who normally do not file a tax return by allowing them to base a rebate on Form SSA-1099, Social Security Benefit Statement or Form RRB-1099, which is the equivalent of the Social Security statement for Railroad Employees. However, seniors are still encouraged to file their 2019 tax return to ensure they receive their recovery rebate as quickly as possible.
Are college students eligible for a recovery rebate?
Only if they are not considered a dependent of their parents. Generally, a full-time college student under the age of 24 is considered a dependent if their parent(s) provide more than half of their support.
I am eligible for a rebate, what do I have to do to receive it?
For the vast majority of Americans, no action on their part will be required to receive a rebate check since the IRS will use a taxpayer’s 2019 tax return if filed or their 2018 return if they haven’t filed their 2019 return. This includes many individuals with very low income who file a tax return despite not owing any tax in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit.
What should I do if I did not file a tax return for 2019 or 2018?
The best way to ensure you receive a recovery rebate is to file a 2019 tax return if you have not already done so. This could be accomplished for free online from home using the IRS Free file program (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free). The bill also instructs the IRS to engage in a public campaign to alert all individuals of their eligibility for the rebate and how to receive it if they have not filed either a 2019 or 2018 tax return.
If I have a past-due debt to a federal or state agency or owe back taxes, will my rebate be reduced?
No, the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.
When will I get my check?
This is the big unknown. Congressional aides have said the checks could roll out in a matter of weeks, according to Politico.
But issuing checks to millions of Americans is complicated, and payments might not arrive for months. Stimulus payments issued in 2008 during the Great Recession took about three months after they were approved in Congress to actually reach consumers, Tax Policy Center senior fellow Janet Holtzblatt noted.
Who won’t get a check?
- High-income earners without children. For instance, individuals who earn more than $99,000 phase out completely from the stimulus plan. Married couples earning more than $198,000 (and no kids as dependents) also aren’t eligible for payments.
- Non-resident aliens. Workers in the U.S. without a green card don’t qualify, according to the bill.