With the Coronavirus pandemic causing chaos every day, Congress and the Trump Administration have reached a deal on the $2 trillion Coronavirus Aid, Relief, and Economic Security Act. The act is also known as CARES or as “phase three” of the coronavirus economic stimulus packages from the federal government.
The unprecedented rescue plan is said to extend unemployment benefits, a $367 billion program for small businesses to help pay their workers who are forced to stay home due to the pandemic, $500 billion for subsidized loans to large industries such as airlines and hospitals, and direct payment to most Americans.
Am I eligible for a stimulus check?
According to the Senate Finance Committee, people on Social Security are eligible to receive their relief payment and don’t need to file a tax return. The federal government will be able to send the payment via the usual way they get their Social Security payments. People with disabilities and retirees are also eligible for this payment. As far as college students, if your parents claim you as a dependent on their taxes you will not receive a payment. But if you’re working and filing your taxes independently you may be eligible. Bottom line, if you have a Social Security number you should be eligible.
The government did note that those who file their taxes using an Individual Taxpayer Identification Number (ITIN) instead of a social security number will not receive a stimulus check. The stimulus check is an advance payment of a tax credit for the 2020 tax year and won’t be included in your taxable income.
How much money will I get?
The direct payouts will be a one-time payment of $1,200 per adult and $500 per child. That being said, people with higher incomes are expected to get less. A married couple could receive up to $2,400 and a family of four could receive $3,400. The reason as to why those with higher incomes will possibly receive less is to ensure that payout benefit the middle and lower class. According to the Cares Act proposal, payments phase out at a rate of $5 per every additional $1,000 in income starting at $75,000 which is the adjusted gross income for singles, $112,500 for heads of household, and $150,000 for couples who are married and filed jointly.
To put this number in perspective, an example would be a single adult earning $85,000. This person would get $700, a decrease of $500 due to their higher income. Some will, unfortunately, receive nothing. A single and childless adult who earns more than $99,000 a year would get no money, and a childless couple with $198,000 would also not receive a check. According to CNBC, the amount you receive will heavily be based on income calculations from your 2018 tax return.
The money aims to help the United States economy by helping citizens through the coronavirus crisis, which has forced nonessential businesses to close across the county. The government has also decided to close schools and universities, moving the courses online due to the risk of Covid-19.
When will I get my stimulus check?
The short answer here is mid-April. According to Treasury Secretary Steven Mnuchin, the government is working together to give out the money quickly. He noted, “As soon as Congress passes this, we will get this out in three weeks.”
The payouts are said to arrive by April 15, however, dates may change due to the appropriations process in Congress. Still, those who set up a direct deposit with the IRS during their taxes should expect to see their money sooner than those waiting for checks in the mail.
Where is the money coming from?
Taxes. CNBC reports it is still unclear as to whether the money will be considered a gift or a loan. In which, yes, some of it may have to be paid back, but officials have yet to announce that. Citizens may have to repay it on a future tax return. For those who have yet to complete your income tax return, this year’s income filing deadline has been delayed to July 15, 2020, as a said “gift,” and could be considered taxable income.
The last time the federal government sent checks to Americans was back in 2008 under President George w. Bush. The Economic Stimulus Act was signed to law back on February 13, 2019, and provided individual tax relief in the form of tax rebates. The money didn’t start going out until two months later in April of that year.
Whether you lean left or right, you’ll be grateful for the check.
This article was originally published on March 25, 2020. It was updated on March 27, 2020, after the government announced who would be eligible to receive a Stimulus check.