Economic impact payments: What you need to know

Written by Eric Beepat

On April 2, 2020

The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.

Who is eligible for the economic impact payment?

Tax filers with adjusted gross income:

  • up to $75,000 for individuals
  • up to $150,000 for married couples filing joint returns
  • Filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds
  • Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return

Who is NOT eligible for the economic impact payment?

  • Single filers with income exceeding $99,000
  • $198,000 for joint filers with no children

Other Items to note for eligibility?

  • Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child

How will the IRS know where to send my payment?

The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?

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

I am not typically required to file a tax return. Can I still receive my payment?

Yes. Individuals who typically do not file a tax return will need to file a simple return to receive the economic impact payment. This includes senior citizens, low income taxpayer, some veterans, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

I have not filed for 2018 or 2019. Can I still receive an economic impact payment?

Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. File it yourself or contact a tax professional (like the CPA that put this together). His contact information is 646-318-7930 or beepatcpa@gmail.com.

I need to file a tax return. How long are the economic impact payments available?

These economic impact payments will be available throughout the rest of 2020.

 

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