Many Americans are waiting to see when the promised economic impact payments (corona virus stimulus payments) are going to reach individuals and families to ease the effects of the COVID-19 pandemic.
On March 30, 2020, the Treasury Department and the Internal Revenue Service announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.
Here is what to expect:
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount 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. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. The IRS will calculate and automatically send the economic impact payment to those eligible.
According to a U.S. Treasury Department announcement, Social Security recipients who are not typically required to file a tax return do not need to take an action and will receive their payment directly to their bank account. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.
The timeline of distribution is still not clear. There is a lot of speculation out there. Let’s hope the much-needed help will not be delayed for weeks and months.
This alert does not purport to be a substitute for advice of counsel on specific matters. Should you have any questions or concerns, please feel free to contact us, we are here to assist!
