Common Questions (and Answers) About Economic Impact Payments
Millions of Americans have been hard hit by the coronavirus pandemic. So, one measure the U.S. government is taking to lessen this financial burden associated with the pandemic is to issue economic impact payments A.K.A. stimulus payments.
While this is welcome news, there are many questions associated with these economic impact payments. In this post, we’ll review common questions and answers associated with stimulus payments.
What are Economic Impact Payments?
Economic impact payments (EIPs) are payments from the Treasury Department made to taxpayers who meet a particular income threshold. The payments are intended to stimulate the U.S. economy and are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
How Much are the Payments?
- Qualifying individual filers will get up to $1,200.
- Qualifying married filing jointly filers will get up to $2,400.
- Additional payments of up to $500 per qualifying child will be made.
Who’s Eligible for Economic Impact Payments?
All U.S. citizens and U.S. residents are eligible. You must have a valid social security number and you may not be claimed as a dependent on another person’s tax return.
There are income thresholds for receiving the full Economic Impact Payment, based on filing status and adjusted gross income (AGI).
- If you have an AGI of up to $75,000 for individuals and up to $150,000 for married couples filing jointly, you will receive the full payment.
What is a Qualifying Child?
A qualifying child is someone who:
- Is the taxpayer’s child, stepchild, sibling, half-sibling, step-sibling or a descendant of any of these individuals (such as a grandchild), or an eligible foster child.
- Can be claimed as a dependent on the taxpayer’s tax return. For those who don’t usually file a tax return, include the child’s information in the Non-Filers: Enter Your Payment Info Here tool(see below).
- Was younger than 17 at the end of the 2019 tax year.
- Is a U.S. citizen, U.S. national, or U.S. resident alien.
- Has a valid Social Security number or an adoption taxpayer identification number.
When Will You Get Your Economic Impact Payment?
The IRS is determining the timing of the stimulus payments.
- Direct deposit: The first stimulus payments were sent by the IRS on April 15. The IRS will continue issuing payments via direct deposit on a weekly basis thereafter.
- Mail: The IRS began issuing checks in late April, starting with households with the lowest Adjusted Gross Income.
How Do You Obtain My Payment?
No further action is needed by taxpayers who filed tax returns in 2018 and 2019.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an EIP of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
In fact, millions of Americans have already received their EIP. If you filed a 2018 tax return, you will receive an automatic economic payment even if you haven’t filed a 2019 tax return yet.
What if You’re Not Required to File a Tax Return?
If you receive social security, railroad retirement, supplemental security income (SSI), or VA compensation and pension benefits and you are not required to file a tax return will also receive an automatic EIP.
Otherwise, if you’re not required to file and don’t receive one of those federal benefits you can use IRS’s Non-Filers: Enter Payment Info Here tool to complete a simple tax return and receive your payment.
What if You’re Above the Income Threshold?
If you have income over the above amounts, your payment is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.