Updates on CARES stimulus checks

Yesterday I posted a video about the stimulus checks to be sent out as a part of the CARES Act signed in law two weeks ago.

There was one part that did not have the right information — it was about whether your tax refund in 2021 would be reduced by the stimulus check.

I gave the wrong information so I deleted the entire video. I did some more research and now it’s clear enough for me to share with you. After this “new” part, I will re-attach an edited video from yesterday with the other information for the rest of this video.

Now, will your tax refund be reduced next year by the amount you will receive this year in stimulus checks? No. It will not affect your next year’s tax refund. This is according to information from the Tax Foundation, an independent nonprofit organization that provides analysis on taxes. The stimulus payment will be considered a “refundable tax credit.”

It is not considered as income nor is it considered some kind of down payment for your 2021 taxes. It is money that the government is giving to people, free and clear, to help out with the coronavirus crisis and economic downturn.

Next year when you file your 2020 tax return, you’ll put the $1,200 stimulus check as a refundable tax credit. It won’t count as income or take away from your refund that you might get from your normal tax withholding from your paycheck.

There is no impact. It’s separate, free money. That is the part that I misunderstood, and my apologies for giving out inaccurate and unclear information. I will include a link from the Tax Foundation where I got the information from.

The second thing — if you are on SSDI or SSI, you are eligible to receive the $1,200 stimulus checks, provided your yearly income is no more than $75,000. I will share more in the next video.

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The first payments are expected to arrive via direct deposit within a few days, but most should expect to get it in the next few weeks. There is no confirmation of the schedule that the money will be sent out.

There was confusion on whether those on Social Security benefits and did not file taxes in 2018 and 2019 would be required to file a tax return in order to receive the stimulus check. The IRS previously required this, but now the IRS has changed to not require this anymore.

The IRS website currently says clearly that if you are a Social Security beneficiary and did not file a tax return, you can still receive a payment. The IRS will use the information on Form SSA-1099.

The IRS has warned the public of scams by people seeking your information. The IRS said they will not contact you so if someone does reach out, it is possibly a scam. Don’t fall for it, be on the alert and avoid scams.

If the IRS does not have your direct deposit information, the IRS said they would develop a website where individuals could provide their banking information online so you can get payments immediately rather than waiting for a check in the mail. Right now there isn’t a website up on IRS yet. They said one would be coming “soon.”

Those who filed taxes in 2018 or 2019 and showed an adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns are eligible to receive the full $1,200 payment. Couples would get $2,400. Each “qualifying” child under an individual or a married couple will receive $500.

If a person has income above $75,000 individually or $150,000 as a joint married couple, the $1,200 payment is reduced by $5 for each $100 above those thresholds. So someone, suppose it is me, made $75,100, I would get a $1,195 stimulus check.

Someone making $80,000 would get a $950 check. Someone making $85,000 would get a $700 stimulus check. Those who make $99,000 a year individually or more would get nothing, and the same applies for married couples filing jointly who make $198,000 or more a year.

CNN reported that for the $500 per child payments — it applies only to children who are 16 years old or younger. The payments will phase out if the parent’s income is higher than the $75,000 thresholds.

Yahoo News reported that it is possible that the government will work with online payment services such as Venmo or PayPal to send the stimulus money, but nothing is confirmed.

AP News reported that for those who are expecting the stimulus money via paper checks through the postal service, it could take up to 20 weeks to receive it because the government will only be able to send 5 million checks per week. However, those with the lowest incomes will receive their checks first. 

That’s all the information I have on the stimulus checks. I can’t give you advice on specific situations. You’ll have to consult with someone for this. I’m just giving out general information.

https://taxfoundation.org/federal-coronavirus-relief.../...

https://www.irs.gov/.../economic-impact-payments-what-you...

https://news.yahoo.com/social-security-beneficiaries...

https://www.cnn.com/.../wheres-my-stimulus-check-when...

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