In an effort to keep financially distressed Americans afloat, Congress has responded with a $2 trillion stimulus package, known as the Coronavirus Aid, Relief and Economic Security (CARES) Act.
One of the most widely anticipated provisions of the stimulus package: payments to individuals that will begin showing up in their credit union and bank accounts within the next few weeks. (Those who don’t have a credit union or bank account on file with the IRS will likely have to wait a little longer to be mailed paper checks.)
Here are some things to know about the stimulus payments:
There are three-dollar figures to be aware of in terms of the stimulus payments: $1,200 will be given to individual taxpayers, $2,400 will go to married couples filing jointly, and families will receive an additional $500 per qualifying child 16 or younger. Those numbers apply to individuals with adjusted gross income (AGI) up to $75,000, married couples filing jointly with AGI up to $150,000 and heads of households with AGI up to $112,500. Keep in mind that AGI will be based on your 2019 tax return, or 2018 if you haven’t filed yet.
Groups that make more than those AGI figures start falling into the “phased out” category, which means the stimulus amount granted goes down as AGI goes up. Individuals and households will be paid $5 less per every $100 they make over the limits. The total phase out amounts, meaning the AGI is too much to qualify for a stimulus check, are $99,000 for single filers and $198,000 for married couples filing jointly, or $136, 500 for head of households.
To give you an idea of how the phase out works, here are estimates of stimulus amounts for different filing status and income amounts. Keep in mind that each qualifying child 16 or younger will add an additional $500 to these stimulus amounts. The payment for children begins to phase out (at the same $5 per $100 of income), after the payment to adults has completely phased out.
- $80,000 AGI: $950 stimulus
- $85,000 AGI: $700 stimulus
- $90,000 AGI: $450 stimulus
Marries filing jointly
- $160,000 AGI: $1,900 stimulus
- $170,000 AGI: $1,400 stimulus
- $190,000 AGI: $400 stimulus
Head of Household
- $115,000 AGI: $1,075 stimulus
- $120,000 AGI: $825 stimulus
- $130,000AGI: $325 stimulus
Stimulus checks will be direct deposited into the credit union or bank account listed on your 2019 tax returns (or 2018, if you have yet to file for last year). If no credit union or bank account is listed on either return, the IRS will send a physical check to your most recent address on file.
One major factor several people are talking about are: College students won’t qualify for a stimulus check if they are being claimed as a dependent on their parents’ taxes. This will force many college students to be determined as ineligible for a stimulus check.
Who is a dependent? By law, a child under the age of 19 at the end of the year, who lives with you for more than half of the year and has not provided more than half of his or her own support for the year, qualifies as your dependent, so long as he or she doesn’t file a joint return for the year. But a full-time student under the age of 24 is also your dependent, even if they live mostly at college—if you provide more than half their support and they aren’t married and filing a joint return.
According to the U.S. department of the Treasury, direct deposits will start on April 9th, Naomi Jagoda, reporting for The Hill, was told by a Treasury spokesperson that fifty to seventy million people will get their direct deposit before April 15.
To find more information available go to the IRS Coronavirus page.