What the Coronavirus Stimulus Package Means for You

TAX NEWS

April 3, 2020 | Famond General Consulting LLC | English

Stimulus Checks/Recovery Rebates for Individuals and Joint Taxpayers

Stimulus checks — up to $1,200 for individuals, $2,400 for joint taxpayers and an additional $500 for each qualifying child — will be based on information from your most recent tax filings, either 2019 or 2018 if you have not yet filed this season.

The first step you should take right now is to file your 2019 tax return, if you have not already. And, if you are getting a tax refund, choose to receive that refund through direct deposit. This will ensure that the IRS has the most current tax filing and direct deposit information for you, which they will use to determine individual stimulus check amounts.

According to the IRS, 80% of Americans will be eligible to receive full or partial payments through the CARES Act.

If you have an adjusted gross income (AGI) of up to $75,000 ($150,000 married filing jointly), you should be eligible for the full amount of the recovery rebate.

*Note, adjusted gross income (AGI) is your gross income like wages, salaries, or interest minus adjustments for eligible deductions like student loan interest or your IRA deduction. Your AGI can be found on line 8b of your 2019 Form 1040.

As your AGI increases, the stimulus amount you get will go down. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $146,500 for those filing as Head of Household and $198,000 for joint filers with no kids.

The stimulus check will be paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount. If you are underpaid based on your 2020 income you may receive more credit. If you are overpaid you don’t have to pay it back.

For additional information, be sure to check out the stimulus package FAQs here.

Student Loan Payment Relief

Under the CARES Act, employers can still make student loan payments on behalf of their employees on a tax free basis, up to $5,250 annually. This means the loan payments would be excluded from the employee’s income. The provision is applicable on loan payments an employer makes from the day the bill was signed into law (March 27, 2020) through Jan. 1, 2021.

Increase in Unemployment Payments

Unemployment payments will be increased by $600 weekly for four months through July 31, and the bill also includes those who were previously not eligible for unemployment, including part-time employees, freelancers, independent contractors, gig workers, and the self-employed.

Financial Assistance Provided for Eligible Non-Profits and Self-Employed Individuals

The Small Business Administration’s loan program is now accessible to more businesses and has an increased cap on loans. This Act provides $349 billion for the Small Business Administration to distribute through a new loan program titled the Paycheck Protection Program (PPP), making non-profits, self-employed individuals and contractors eligible to receive assistance.

The Federal Reserve lending program will also receive $454 billion in support — loans from this fund will be for no longer than 5 years and will be aimed at aiding nonprofits and businesses with around 500-10,000 employees with the goal of retaining at least 90% of their workforce with full compensation and benefits.

Penalty Waived for Early Retirement Withdrawal

If you need to take money out of your retirement plan ASAP, keep in mind that the 10 percent early withdrawal penalty may be waived on up to $100K of retirement funds withdrawn if you are considered a qualified individual impacted by Coronavirus. You are a qualified individual if:

• You, your spouse, or dependent are diagnosed with Coronavirus
• You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
• You had hours reduced due to Coronavirus
• You are unable to work due to your child care closing or reducing hours

Additionally, income attributable to such distributions would be subject to tax over three years, and you may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions.

Delay of Social Security Payroll Tax Payment for Employers

Employers, including the self-employed, can delay the payment of the employer portion of the Social Security payroll tax for the remainder of the year and pay back the liability over the next two years.

Stimulus Package FAQs

Who is eligible for the stimulus payment? Will I get a stimulus check?

Individuals with adjusted gross income (AGI) up to $75,000, $112,500 Head of Household, and married couples filing jointly with up to $150,000 in income and an eligible social security number will receive the full payment. For tax filers with income above these amounts, the stimulus payment decreases by $5 for each $100 above the thresholds. Single filers who make more than $99,000, Head of Households that make more than $146,500, and joint filers with no children who make more than $198,000 are not eligible for the stimulus payment.

If you filed tax returns for either 2018 or 2019, you’ll automatically receive a stimulus payment of up to $1,200 for individuals, $2,400 for married couples, and $500 for each qualifying child, based on your latest taxes filed.

How much stimulus money will I get?

If you’re wondering how much money you may qualify for under this relief package, Famond General can help — just call or email us.

Eligible taxpayers will receive up to $1,200 for individuals, $2,400 for joint taxpayers and an additional $500 for each qualifying child under 17.

If you have an adjusted gross income (AGI) of up to $75,000, $112,500 Head of Household, $150,000 married filing jointly, you should be eligible for the full amount of the recovery rebate. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $146,500 for those filing as Head of Household and $198,000 for joint filers with no kids. Your eligibility will be based on information from your most recent tax filings.

When will I get my stimulus check? How long will it take to get my stimulus check?

According to the IRS, the distribution of stimulus checks will begin in the next three weeks.

Can I get my stimulus check if I haven’t filed my 2019 taxes?

Stimulus checks will be based on information from your most recent tax filings, either tax year 2019 or 2018 (if you have not yet filed this season).

To ensure that the IRS has the most current information, the first step you should take right now is to file your 2019 tax return, if you have not already. And, if you are getting a tax refund, be sure to choose to receive that refund through direct deposit.

I’ve already filed my 2019 taxes — do I need to do anything else to receive my stimulus checks?

If you have filed your 2019 taxes, you don’t need to take any further action in order to receive your stimulus check.

How will I get my stimulus check? Can the IRS send the stimulus payment to me via direct deposit?

The IRS will be using the information from your most recent tax return to send you your stimulus check.

Famond General Tax Service recommends that you file your 2019 tax return immediately, if you have not done so already. If you are getting a refund, be sure to choose to receive your refund through direct deposit as this will ensure that the IRS has the most current tax filing and direct deposit information.

I filed a tax return in 2018 and/or 2019 but didn’t provide my direct deposit information. Can I still get a stimulus check if the IRS does not currently have my direct deposit information?

The IRS won’t have your direct deposit information if you didn’t provide it on your 2018 or 2019 tax returns. This could happen if you had a balance due for 2018 and 2019 or if you requested your refund by check for those years.

In the coming weeks, the Treasury plans to develop a web-based portal for you to provide your banking information to the IRS online so that you can receive payments immediately as opposed to checks in the mail.

Can I still get a stimulus check if I don’t need to file a tax return because I don’t have income from wages or make enough money? How will I get my stimulus payment?

You may not need to file a tax return because you earn income below the IRS filing threshold and aren’t required to file federal income taxes.

If you aren’t required to file a tax return, don’t worry — you are still eligible to receive a stimulus payment.

For those that aren’t required to file a tax return,Famond General Tax Service is launching a stimulus registration product to help you submit all the necessary information to the IRS, so that you can quickly and easily get your money.

Can I still get a stimulus check if I only have Social Security income and don’t file a tax return? What do I need to do next?

If you receive Social Security income and are not typically required to file a tax return, you do not need to take any action — you will receive your stimulus payment directly in your bank account.

The IRS will use the information from your Form SSA-1099 or Form RRB-1099 to generate your stimulus payment if you did not file tax returns in 2018 or 2019. Keep in mind that you will receive your stimulus payment as a direct deposit or by paper check, depending on however you normally receive Social Security benefits.

If I just lost my job, but don’t qualify for a stimulus check based on 2018 or 2019 income. What does that mean for me?

If your 2018 and 2019 income was above the threshold, a stimulus check will not be automatically deposited into your bank account in the next couple weeks, but you might see it in the form of a tax credit when you file your 2020 tax return in 2021, as the credit is for 2020.

Does the stimulus payment impact my eligibility for other assistance programs?

The stimulus payments are not considered taxable income and will not affect eligibility for other government programs and benefits. Additionally, the bill temporarily suspends some of the requirements to use tax refund money to repay debts, including money owed to the IRS.

I am claimed as a dependent on my parents’ tax return but I also work and file a tax return. Will I receive a stimulus check?

Under the CARES Act, if you are claimed as a dependent on someone else’s return you cannot receive a stimulus check. If you were claimed as a dependent for 2019, but not 2020 you will most likely not receive a stimulus check. You may however, be able to get a tax credit for it when you file your 2020 taxes in 2021.

I owe (a previous tax debt/student loan debt) can I still receive a stimulus check?

Yes, the CAREs Act waives any previous outstanding tax debt or student loans when issuing stimulus checks. The only debt that is not waived is unpaid child support payments.

I support my mother/father and claim them as a dependent, but they get social security income. Can they still receive a stimulus check?

Although your parents received social security income they cannot receive a stimulus check if they are claimed as dependents. Under the CAREs Act, dependents are not eligible for a stimulus check.

We’ve Got You Covered

You can be confident that Famond General Tax Service is here to keep you informed and help you file now.

Be sure to keep checking back here for the most up to date tax information and changes in response to COVID-19.