After months of negotiations and the president’s delayed signature, a second round of stimulus checks are finally headed out to American families who could use some financial help especially after the holidays.
The $900 billion COVID relief package became law Dec. 27 and is composed of various renewals and revisions to many public relief programs created by the CARES ACT in March. It extends much needed relief for American businesses, workers and families through extensions of Pandemic Unemployment Assistance, rental assistance, the Paycheck Protection Program and a much awaited second round of stimulus checks.
Though the first round of stimulus checks were sent out earlier this year, many questions are being asked about the new stimulus payment, below we take the time to explain “stimulus 2.0.”
Exactly how much is the next stimulus going to be?
The relief package calls for a second stimulus of $600 per individual and $1,200 per married couple, and an additional $600 for each qualifying dependent 16 years or younger. Though only half the amount of the initial $1,200 check, this payment will still come in handy, indeed. A family of four would receive $2,400 stimulus payment — $1,200 per couple and $600 for each dependent.
Who will get the second payment?
Individuals earning up to $75,000 and couples up to $150,000 who filed a 2019 tax return using a valid Social Security number will be eligible for the full payment. Unlike the last stimulus, mixed status families will receive the $600 payments for taxpayers and dependents with a valid Social Security number.
Your 2018 tax year income won’t be used to determine eligibility if you haven’t filed for 2019. You must have filed a 2019 return to a payment in this go-round. Social Security beneficiaries, veterans and retirees will still receive the payments, for themselves and qualified dependents just the same as the first stimulus payment. Low-income taxpayers who weren’t required to file are eligible too, as long as they’ve filed their 2019 taxes.
When and how will I get my money?
This time, the Treasury is a little more prepared, because they’ve done this before, which has resulted in faster deposits. Most Americans will receive direct deposits to the last bank account on file with the IRS and checks will be sent in the mail to the address on file for others. The sooner the better in regard to this payment, and thankfully the Treasury began sending payments as early as Dec. 29. The Treasury expects to have them all sent out by Jan. 15, 2021. Taxpayers can check their payment status by visiting IRS.gov/getmypayment.
Do I need to do anything special to get my payment?
As of right now, there isn’t anything special that you need to do besides wait on it. It’s important that you’ve filed a 2019 tax return if you expect to get this second stimulus check. The IRS won’t call you on the phone or email you to update your information. There’s also no way to get it faster or to get a bigger payment than you’re eligible for. So if someone calls or emails you to tell you any different, be sure to call their bluff for what it is … a scam.
How will the stimulus affect my 2020 taxes?
The stimulus payment also known as the “Economic Impact Payment” or “Tax Rebate” is an advance of a 2020 tax credit known as the Recovery Rebate Credit. If you are eligible based on your 2019 tax return you will receive the advance payment of the Recovery Rebate Credit to be sent out as early as this week. If you didn’t qualify based on your 2019 tax information but you qualify based on your 2020 tax information, you can still receive the credit on your 2020 tax return. If your situation changed in 2020, such as you made less income, had a baby, or got married, you will receive the additional payments you’re eligible for when filing your 2020 taxes. If you were overpaid because you qualified in 2019 but not 2020 you still won’t have to pay it back.
What if I still haven’t received the first stimulus check?
If you haven’t received your stimulus payment, it’s not too late to get it. Though you didn’t receive an “advance” payment of the recovery rebate credit or stimulus payment in 2020, you can still receive it when you file your 2020 taxes. Eligible taxpayers can claim the credit on their 2020 Form 1040 or Form 1040-SR.
Also, if you’ve moved neighborhoods make sure that you submitted a change of address form to the Post Office so that your mail can be forwarded. You can also submit IRS Form 8822-Change of Address and be patient for it to process.
What else should I know?
There will be more information coming soon so be sure to stay tuned to IRS.gov for any additional guidance in the days to come. Visit IRS.gov/coronavirus for the latest information regarding your payment and IRS.gov/getmypayment to check the status of your stimulus check.
Brittany Sabalza, enrolled agent, is director of continuing education for Pro Tax Solutions Indianapolis and a tax columnist.
