On March 30, 2020, the Treasury Department and the Internal Revenue Service (IRS) announced economic impact payments will start being distributed in the next three weeks. No action is required for most people as the distribution will be automatic. However, some seniors and others who normally don’t file tax returns will need to submit one in order to receive the payment. Here’s what you need to know about economic impact payments.
According to the IRS, tax filers with an adjusted gross income up to $75,000 for individuals and up to $150,00 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the 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.
How much will you receive?
The IRS states 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. Parents also receive $500 for each qualifying child.
Where will the payment be sent?
A majority of people don’t need to do anything. The IRS will calculate and automatically send the economic impact payment to those who are eligible. The payment will be deposited directly into the same banking account reflected on your 2019 tax return.
If you haven’t filed your return for 2019, the IRS will use information from your 2018 tax return. If the IRS doesn’t have your direct deposit information, the Treasury Department plans to set up a web-based portal so you can provide your banking information for direct deposit.
What if you haven’t filed a tax return?
If you have not filed a tax return for 2018 or 2019 or are not typically required to file a tax return, you can still receive your economic impact payment. Find more information at irs.gov.
The COVID-19 pandemic has caused financial hardship for people across our country and the world. This stimulus payment is an effort to help Americans during this trying time. For more details about economic impact payments, visit the IRS website.
*Consult with a qualified tax professional for specific tax advice.