03/29/2020
Summary of the $1,200/$2,400 checks from the government:
I'm sure by now you've heard that the government may be sending you a check for $1,200 (or $2,400 if married filing jointly) + $500 for each eligible child.
From reading the text of the Bill, plus existing IRS codes, how we see this working is as follows.
The check is treated as an advanced refundable tax credit against your 2020 taxes.
This means there is a new tax credit for 2020 for the amounts listed above.
The IRS will use your 2019 income tax filing for the determination on whether or not you are eligible for an advanced refund of this credit. If 2019 is not filed yet, they will look at 2018.
The thresholds for payment are an AGI of $75,000 if single, $150,000 if married filing jointly, and $112,500 if head of household.
When you file your 2020 return, that is the true test of whether or not you are eligible for the credit.
If you were under the threshold and you got an advanced refund check, then no issues.
If you were under the threshold in 2020 and you did not receive a refund check (based on 2019/2018 being too high), then you'll get the benefit of the credit when you file your 2020 return.
[[edited to remove clawback info pending more guidance]]
