Who gets a stimulus check?

As the economy has ground to a screeching halt as a result of the coronavirus, Congress has acted to put money back into the American economy. The $2 trillion stimulus package that was enacted into law includes provisions for both individuals and small businesses. One of the most talked about items of this stimulus package is the payments that are scheduled to be made to most American individuals and families.

The U.S. government will be making direct deposits into your bank account if they have your account information on file as a result of you filing your income tax returns. If they do not have a record of your bank account then they will be mailing you the stimulus check.

The amount of the check will depend on a number of factors including your marital status, your income, and whether you have children.

The full payment is $1,200 to each adult with annual income below $75,000. A married couple with income below $150,000 would therefore receive $2,400. A qualifying family with dependent children will receive an additional $500 per child. So, a married couple with two children with income below the threshold will receive a payment of $3,400.

A single person with income over $75,000 will begin to see a phase out of the $1,200 stimulus check. Once the income reaches $99,000 for a single person they are no longer entitled to receive the stimulus payment. For a married couple these figures are doubled, so they will receive the full stimulus check if their income is below $150,000. For incomes between $150,000 and $198,000 there is a phaseout, and there would be no stimulus available for a married couple if their income is over $198,000.

The IRS is using the most recent income tax return filed, so for those couples that may not have qualified based on their 2018 income, but whose income has dropped, they would benefit through getting their 2019 tax returns filed sooner rather than later.

The rules to qualify can and do vary.

My 21-year-old independent daughter will be receiving this payment, but my 19-year-old that is in college will not qualify because she is my dependent.

The IRS is still working out the logistics of getting the funds out to taxpayers in a timely manner. There has been some discussion that lower income taxpayers will receive their funds sooner than those with higher incomes.

As you can imagine, timely processing of these stimulus payments is proving to be a great challenge for the IRS. Especially when we consider that they are working at reduced capacity due to the coronavirus along with the rest of the nation.

My mother-in-law recently reached out to me inquiring as to whether she too will receive the stimulus payment.

Since she is retiree whose primary income is Social Security and a small retirement account, she was not sure if she would qualify. In her mind she has not been adversely financially impacted by the coronavirus. I assured her that she, like all qualifying retirees would be receiving this payment.

The IRS is still working out the logistics of how they are going to determine who qualifies and how to get payments to those individuals that may not be filing income tax returns.

The filing requirement is based on income, and as such some people may not have a filing requirement if their income falls below those tax filing thresholds. An adult who normally does not file an income tax return because their income falls below the tax filing threshold should seriously consider filing a return to ensure that they receive the $1,200 stimulus payment.

We are certainly living in confusing and changing times. No one has a crystal ball to know how this all will shake out. In the meantime, the government is doing what it can to support Americans through this stimulus program in this time of need. Paul Pahoresky is a partner in the accounting firm of JLP CPAs. He can be reached at 440-9741040 extension 214 or at paul@jlpcpas.com. Consult your tax advisor for your specific situation for additional information and guidance on these topics.