The following Q & A about the US Government’s Stimulus Package is graciously provided by Pesach Woznica, CPA of PWTax. For further questions or to file your taxes with PWTax, please click here.
Q. Who is eligible for the Economic Impact Payment and what will the amounts be?
A. US citizens with valid SSN who cannot be claimed as a dependent on someone else’s return and have income below the thresholds are eligible for the Economic Impact Payment. US citizens 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. Each of these threshold amounts increases by $10,000 for each additional qualifying child.
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.
Q. Do I have to do anything to get this money?
A. No, the government will simply send either a bank transfer to the bank account on file with the IRS from the last filed tax return or will mail a check to the address on the tax return if no bank account information is in their system for the taxpayer.
Q. Can I update my mailing address or add my US bank account information with the IRS to receive the stimulus?
A. Yes. You can do this by following the link from the IRS website: https://www.irs.gov/coronavirus/economic-impact-payments
Q. Will I likely receive the stimulus money faster if the IRS has my US bank account information on file?
Q. Will I receive a payment if I do not make enough money to be obligated to file?
A. Yes, individuals who do not make enough money to normally have to file a tax return, are also eligible for the Payment. Non-filers must apply for the payment at the IRS new online tool https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here and do not need to file a tax return. Filing a tax return is not recommended for those eligible to use the online non-filer tool.
Q. Will I be getting the payment even though I didn’t file 2018 and 2019 yet?
A. For now, the IRS will be sending out the payments based on the 2018 or 2019 tax returns filed. If you file your 2018 or 2019 tax returns by the end of 2020 you will probably get the stimulus automatically once the IRS processes your returns. If you don’t file the 2018 or 2019 tax returns by the end of the year you will be able to claim the credit on your 2020 tax return.
Q. Is it important to file my 2019 tax return immediately in order to be eligible for this?
A. The stimulus package money will actually be part of the 2020 tax return. The US government wants to give out this money though now already in advance and not wait until US citizens file their US tax returns in 2021 for the 2020 tax year.
If the stimulus payments are received now already, they will not receive it again when they file their 2020 tax returns. However, it is important to realize that if one does not receive the stimulus now, they should be receiving it instead when they file their 2020 tax returns.
Q. Until when can I file a return to be eligible?
A. Payments will be made throughout the rest of 2020. If you don’t receive a Payment this year, you can also claim it by filing a tax return for 2020 next year.
Q. What if I am several years behind on my taxes and am in the process of trying to catch up. Can I still benefit from the stimulus?
A. Yes, as mentioned above, if one misses out on receiving the stimulus now, they should receive it at a later point in time instead of when they file their 2020 tax returns.
Q. For which children will the $500 be given?
A. For children who were claimed for the “child tax credit” (under age 17). If the child wasn’t claimed on the 2018 return, as long as they end up being claimed on the 2019 or 2020 tax return, the stimulus will ultimately be given for that child as well, it will just take much longer.
Q. I received an additional $500 Payment in 2020 for my qualifying child. However, he just turned 17. Will I have to pay back the $500 next year when I file my 2020 tax return?
A. No, there is no provision in the law requiring repayment of a Payment. When you file next year, you can claim additional credits on your 2020 tax return if you are able to eligible for them, for example if your child is born in 2020.
But, you won’t be required to repay any Payment when filing your 2020 tax return even if your qualifying child turns 17 in 2020 or your adjusted gross income increases in 2020 above the thresholds listed above
Q. If I am missing SSN’s for some of my children and therefore did not include them on my 2018 or 2019 US tax returns, will I miss out on “stimulus” money that I was supposed to receive?
A. Any stimulus money that you missed out on based on your 2018 or 2019 tax returns will be paid to you through your 2020 tax return filing. For example, if you have an additional 2 children included on your 2020 tax return that was not included on your prior year’s tax returns, then you should receive an additional $500/child through the 2020 tax return.
Q. Will I still get the check if I owe the IRS some money?
A. Yes. If your refund would normally be seized to pay a tax debt, that shouldn’t happen here. Shouldn’t. Assuming it works as planned.
Q. Can a Non-US citizen who has investments in the US and files a 1040NR receive the stimulus?
A. No. Only a US citizen with a social security number is eligible for the payment.
Q. Is an ITIN holder who is not a US citizen eligible for the Stimulus payment?
A. No. Only a US citizen with a social security number is eligible for the payment. Additionally, a US citizen with a social security number who files a joint return with a non-US spouse who has an ITIN number will not be eligible for the payment.
When filing a joint return both spouses must have a valid SSN to qualify for the payment. If spouses file separately, then the spouse who has an SSN may qualify for the payment.
Q. Is there is a deadline to file for the non-filer stimulus payment?
A. No. (several groups of federal benefit recipients had to update their dependent information if they didn’t file a tax return in 2018 or 2019 and have dependents so they can quickly receive the full amount of their Economic Impact Payment.
This includes Social Security recipients, Railroad Retirement benefits, Supplemental Security Income (SSI), and Veterans Affairs beneficiaries. No other deadlines have been given as of now.)