With the CARES Act finally passed, hard-working Americans affected by the coronavirus pandemic are waiting for their stimulus check to come in from the IRS. Most people likely don’t have to do anything to receive this money.
However, there are others in a different situation. These people don’t realize that they’ll be waiting much longer to receive an economic impact payment that may not come. They also may not realize that more work is required on their part if they expect to receive stimulus cash at all. Many of those people have two things in common: a lack of knowledge about the stimulus check process and unfiled taxes from previous years.
What to expect from your stimulus check
It’s hard to know exactly what these economic impact payments will look like, especially when there’s so much media buzz around them. We’ll set the record straight.
Here are some basic facts about the stimulus checks:
- Not everyone is eligible for a payment
- The payment amount varies depending on your adjusted gross income
- The IRS will be using various methods to disperse the checks as effectively as they can
- There is no clear time frame for the arrival of payments but you can check your payment’s status on the IRS’s website
Those statements barely scratch the surface of this huge stimulus effort. Let’s dive further into the details.
Who will receive a check
Individual taxpayers who make under $99,000 and joint-filing couples who make under $198,000 are eligible for an economic stimulus payment. Those who make above those respective numbers are not eligible for a check.
Dealing with back taxes? Not to worry, you’re still eligible for a stimulus check. And these payments are not like a tax refund, which can be garnished for your tax debt. The only people who could have a reduced check because of debt are parents with outstanding child support. So even with tax debt, you should receive a stimulus payment (so long as you meet the income requirements). The IRS has also announced the People First Initiative to help taxpayers deal with their tax debt during the coronavirus pandemic.
Unfortunately, others may not be eligible to receive a stimulus check, like many college students, some disabled adults, and immigrants without social security numbers.
How much money you’ll receive
To calculate how much you’ll receive, the IRS will be using your 2019 tax return if you’ve already filed it. If you haven’t filed yet, they’ll use your 2018 tax return instead.
Individual taxpayers who earn up to $75,000 annually should expect to receive the full economic impact payment for individuals of $1,200. Joint-filers who earn up to $150,000 annually should expect to receive the full payment for couples of $2,400. Filers may also receive up to $500 per child.
For filers who make above those amounts, payments will be reduced by $5 for each $100 above those thresholds. Payments will not be given for individual filers with income exceeding $99,000 and couples filing jointly with income exceeding $198,000. To determine how much you will likely receive, you can use this stimulus check calculator.
These payments will not be taxed by the IRS.
How the IRS will disperse your check
If you used direct deposit to receive your tax refund for 2018 or 2019 taxes, you’re in luck. The IRS will be sending out payments to that same direct deposit account on file. This should make it quick and easy to receive your payment.
For those taxpayers without bank account information on file, the IRS has released an online Get My Payment portal. This portal allows taxpayers to provide their banking information to the IRS so they can receive their stimulus money sooner.
Some paper checks will be sent out, beginning on May 4. These will take longer to get to recipients, but those with the lowest adjusted gross income will receive their paper checks first.
When your check will arrive
For those receiving direct deposit payments based on banking information included in your recent tax returns, your check should have arrived between April 13 and April 17.
Arrival time will vary for those without banking info on file with the IRS. You can always check the status of your economic impact payment with the IRS’s helpful Get My Payment tool. You can also provide your banking information using this tool to attempt to receive your check sooner.
How unfiled taxes could impact your stimulus check
So, what happens if you haven’t filed your taxes in the past few years? Does that mean you won’t get a stimulus check? Not exactly. You can still get a stimulus check even with unfiled tax returns. However, you may need to jump through a few hoops first.
You’ll need to file your taxes ASAP to be eligible for a check
If you are legally required to file taxes but haven’t for the past few years, you’ll need to file at least your 2018 tax return. Otherwise, you may not receive an economic impact payment. And while the tax deadline was pushed to July 15 due to COVID-19 and taxes complications, you may still want to get your 2019 tax return in ASAP.
Your best bet is to speak to an experienced tax professional who can help you file in the safest, most effective way possible. This can help you minimize any trouble your unfiled taxes may cause with the IRS while still giving you your best shot at getting a stimulus check.
Weren’t required to file taxes for 2018 or 2019? You’ll need to go to this non-filers page on the IRS’s website to provide additional information. Do not use this page if you were required to file a tax return. Otherwise, you could make the process of receiving your stimulus check much longer and more complicated.
There are a few major exceptions to this “File those unfiled taxes ASAP” rule. Social Security recipients and railroad retirees don’t need to file returns for 2018 and 2019, as the IRS can use their 1099 statements to determine eligibility. However, since those statements don’t provide information about dependents to the IRS, anyone who falls in those categories won’t see any additional money for their children.
Unfiled taxes can slow the arrival
If you still need to file your taxes in order to receive a stimulus check, chances are you’ll receive your money later than others. Arrival time is a little out of your control at this point. The IRS can only disperse payments to those people whose information is already on file.
However, there is one thing you can do to speed that arrival time up. When filing your previously unfiled taxes, be sure to include your banking information for direct deposit. This will give the IRS the information they need to disperse your economic impact payment.
While these economic impact payments will be available for the rest of 2020, that’s no reason to wait to file your taxes. The sooner you file, the sooner you can expect to get your stimulus check.
Need help filing your taxes to ensure you receive your economic impact payment? Give our team of tax experts a call. Many tax offices may be shut down in this difficult time, but our professionals are always standing by ready to help. And we can do your taxes the social-distancing way without a face-to-face visit.
*Read the original post on our Tax Defense Network blog