New financial relief packages to address the coronavirus pandemic are in the news all the time these days. It’s hard to keep them all straight. Of all the new programs, many people are looking out for that Economic Impact Payment from the IRS. When the payments were announced by the Secretary of the Treasury, he projected an issue date of about April 6th. At the time, the IRS said it could take a month.
One month is the estimate for direct deposit payments to hit taxpayers’ bank account, assuming they used direct deposit (or direct debit) for their tax refund or payment. Paper checks could take until August, or longer! So, while you are waiting, here are a few things you might want to know about Your Economic Impact Payment:
- How much will I get?
The Economic Impact Payment amount varies by tax filing status and adjusted gross income (AGI). Single taxpayers with an AGI under $75,000 will receive the full stimulus payment of $1,200. Above $75,000, there is a sliding scale up to $99,000, where it phases out and there is no payment. For a married couple the numbers are doubled. The Head of Household fling status limitation starts at $112,500 and fully phases out at $136,500. The payment is $500 for each qualifying dependent child.
- How will I get my payment?
Taxpayers who used their bank information for their 2019 or 2018 tax refund or payment will get the stimulus payment direct deposited into the same account. Social Security recipients who do not file a tax return will have funds deposited into the account used for their benefits. Otherwise, a check will go to the address on file. The IRS plans to have a website for taxpayers without an account on file to provide that information.
- Will my payment impact my refund when I file my 2020 income return?
The short answer is, “no.” The Economic Impact Payment does not have to be repaid and it will not offset any refund you might be owed when you file your 2020 federal income tax return. The IRS payment that arrives shortly will be calculated on the AGI from 2019 or 2018, not the AGI for tax year 2020, which is not known yet. Therefore, the IRS plans to include a payment “reconciliation” on 2020 federal tax return. Taxpayers who should have received a higher payment because their 2020 AGI was lower will get a “credit.” Taxpayers in the opposite situation – a higher AGI for 2020 – will not have to refund the overpayment.
More tools and details are available about how much of an Economic Impact Payment you will get and when you will get it. The Washington Post has put out a “stimulus calculator” to help people determine the amount of the stimulus payment based on their income and family size. Plus, as usual, the IRS website has you covered: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know