03/29/2020
We know there is a lot of information and some confusion around the Coronavirus Aid Package signed just moments ago, so we wanted to lay it all out for you.
Who qualifies for stimulus checks?
Virtually all tax-filing American adults earning up to $99,000 annually will be eligible for some form of direct assistance from the government. Married couples and joint filers who earn up to $198,000 are also eligible, as are heads of household who earn up to $146,500.
How much will the stimulus checks be worth?
Individuals who make up to $75,000 per year and heads of household who earn up to $112,500 will receive a $1,200 rebate from the federal government, while couples who earn up to $150,000 annually will receive $2,400. For those who exceed those income levels, the benefits are gradually reduced at a rate of $5 for every $100 of additional income, and are eventually capped at $99,000 for individuals, $146,500 for heads of household, and $198,000 for couples. Additionally, parents are eligible for a $500 rebate per child.
When will the stimulus checks be sent out?
This is where it gets tricky. Treasury Secretary Steven Mnuchin has said that he'd like to see Americans start receiving direct assistance in as little as two or three weeks after the stimulus package is signed into law-but that seems exceedingly optimistic. As Erica York of the Tax Foundation think tank notes, the quickest time frame in which the federal government has previously been able to issue stimulus checks has been six weeks.
"Historical precedent, plus the unprecedented crisis we're in, leads me to believe May is the earliest the [Internal Revenue Service] would be able to start sending any checks," York says.
How will I get my stimulus check? Will it be delivered through direct deposit?
For the roughly 70 million Americans who have already provided their direct-deposit bank account information to the IRS, rebates should be pouring into these accounts within weeks of the bill's passage, Senate aides told the New York Times on Wednesday. But those who haven't provided such information may have to wait up to four months for their checks to arrive-a time frame that surely works against the bill's intention of providing financial assistance to struggling Americans as soon as possible.
Is the stimulus check a loan-and will I have to pay it back?
No. As a direct payment designed to assist Americans through difficult economic times, the stimulus checks are yours to keep.
Are the stimulus checks taxable?
No. However, for Americans who have yet to file their 2019 income taxes, the rebates will need to be based on their 2018 income levels. That means that they could be subject to adjustment once people finally file their 2019 taxes, depending on whether they received too large or too small a rebate based on their most recent income levels.
The Tax Foundation's Erica York notes that the most recent version of the bill indicates that taxpayers who receive too large a rebate would not be required to return funds to the government, while those who received too small a check would see their rebate adjusted upwards.
Will retirees and Social Security beneficiaries get stimulus checks?
Yes. The proposed bill includes language that allows Americans receiving Social Security-many of whom are retired and don't file taxes-to obtain direct financial assistance through the coronavirus stimulus package. In such cases, the government would access their data through the Social Security Administration to determine their rebate.
That said, not all older people who are already reliant on government assistance are immediately eligible for a rebate. According to Steve Wamhoff of the Institute on Taxation and Economic Policy (ITEP) think tank, the current bill excludes recipients of Supplemental Security Income (SSI), a federal welfare program granted to elderly and disabled people who are often living in poverty and, in many cases, aren't required to file tax returns.
***Thank you to Fortune Magazine for this great information.
