Will I Ever See the Stimulus Money I was Promised?
Here’s hoping that this email and my “not so short video” answers your questions about the stimulus checks or at least clears up some of the confusion.
Remember: The amount you get in your stimulus check in the coming months is determined by your 2019 or 2018 tax return (whichever tax return was most recently filed). Next year, when we prepare your 2020 tax return we will complete a reconciliation to see if you qualify to get more money. The good news is that if anyone were not qualified or should have received less money you will not have to return it!
How to use the IRS portal to update your banking information with an important update about old/new addresses: we have received reports that their has been some luck using old & new addresses, so try both ways.
Link to the IRS portal
Link to the IRS landing page with FAQ’s
Do I even qualify?
Not everyone qualifies for one of the payments, which is being distributed under a new federal law that aims to give Americans a quick cash infusion and help the economy recover from the devastation wreaked by the Coronavirus pandemic.
Under this program, individuals with an adjusted gross income of $75,000 or less are eligible for a one-time payment of up to $1,200 ($2,400 for joint tax returns) and $500 for each qualifying child. Those with little or no tax liability also will get $1,200 ($2,400 for joint returns).
But the payments start to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for a joint return. The payments phase out completely for single filers with incomes exceeding $99,000, $136,500 for head of household filers with one child and $198,000 for joint filers with no children.
The payments will be sent via direct deposit to people who already have provided the Internal Revenue Service with their bank account information. Those who haven’t will receive a check in the mail (this video will show you how to provide the IRS with your current banking information).
Will this eat into my tax refund for 2020?
No. The “advance” you’ve been hearing about is in reference to a special tax credit that will appear on the tax return you file in 2021 for the 2020 tax year — a tax credit that wouldn’t have been there if it wasn’t for these stimulus checks. The good news is that the Internal Revenue Service isn’t giving you some of your 2020 tax refund upfront. The stimulus check will be in addition to what you would have otherwise received.
Is this money part of my taxable income for 2020?
No. This money is not taxable income. It won’t be taxable and it won’t affect your income tax bracket for 2020.
Can I still get something if I don’t expect to get a tax refund for 2020?
Yes. Some tax credits just mean you owe less money to the government, so if you don’t owe anything, they don’t apply to you. The stimulus check is a refundable tax credit, like the American Opportunity Tax Credit or Earned Income Tax Credit. You can actually receive a refund even if you don’t have a regular over payment or owe anything. You will get the funds you are entitled too no matter what!
What if I qualify for a bigger stimulus check with my 2018 return than with my 2019 return?
For anyone who has already filed their return for the 2019 tax year, there’s no turning back — the Internal Revenue Service will use your most recent tax return to calculate your stimulus check amount.
If you haven’t filed your return for 2019 by the time checks are distributed, the calculation will be based upon your 2018 tax return which includes banking and income information. In some cases we have recommended that people hold off their filing based upon 2018, 2019 and our 2020 projections. Even if you receive more based upon this scenario you will not have to return the money.
What if my finances or my family change by the time I file my 2020 taxes next year?
This is a unique tax credit in that you’re getting these checks now, for a tax return you’ll file next year. Many people will find that, by the time they’re filing their 2020 tax return, their circumstances have changed in one of the two ways that affect your stimulus check amount — you could gain or lose a dependent, for example, or your income could change significantly.
Rest assured that you won’t be penalized one way or another when you file your taxes for 2020. Anyone who newly qualifies will get the money they’re owed in the form of a refundable tax credit (a higher tax refund or a lower tax bill), and anyone who no longer qualifies will not have to send it back.
Students age 17 or older don’t qualify for a stimulus check if their parents or guardians claim them as a dependent. Their parents won’t get the $500 per child payment either. That applies only to children ages 16 and younger. The result is that many high school juniors and seniors won’t get a check and their parents won’t get the $500 additional stimulus credit.
Elderly and disabled people
Most senior citizens will qualify for a check. The exception: Those claimed as dependents by their children or someone else.
Parents of babies born in 2020 will have to wait until next year to receive their $500 payment for the child.
We are here to help you through these trying times and wish health and safety for you, your family and friends.