Counting on a stimulus check? Here’s what could affect how much money you get
Roughly 9 in 10 American households will soon receive a federal stimulus check to help them stay afloat financially during the recession caused by the coronavirus pandemic. But certain factors could affect how much you get, as well as how fast you receive payment.
The checks, part of the $2.2 trillion economic relief package signed into law last month by President Donald Trump, should begin landing in people’s bank accounts in the next three weeks. For now, consumers already have plenty of questions about the payments based on the number of questions and comments posted on social media, including CBS News’ Facebook page.
RELATED: Social Security recipients will automatically get stimulus checks, Treasury says in reversal
Adding to the confusion is an about-face this week from federal agencies about the eligibility of some Americans for a stimulus check. On Monday, the IRS said millions of Social Security recipients who don’t normally need to file tax returns would have to file a “simple tax return” to qualify for a check. But two days later, the Treasury reversed that decision, announcing that all Social Security recipients would automatically receive the payments.
First and foremost, the payments are based on your annual income: $1,200 for individuals who earn less than $75,000 per year, or $2,400 for couples who earn less than $150,000 annually, as well as $500 per child younger than 17. That means the vast majority of U.S. households will get a check, said Howard Gleckman of the Tax Policy Center.
If you got a tax refund in 2018 or 2019 via direct deposit, that’s how you’ll receive your stimulus check. “Most people aren’t going to get [paper] checks — they will get direct deposit,” Gleckman said.
But what if the IRS doesn’t have your bank information? Read on for answers to that question and more about what could affect your stimulus check.
Updating your bank account info
The quickest way to get your stimulus check is through direct deposit. But what if you didn’t include your bank account information on your 2019 or 2018 tax returns?
The IRS said the Treasury Department has developed a web-based portal for individuals to provide their banking information to the tax agency online. That will allow consumers to receive immediate payment instead of waiting for their checks to arrive in the mail.
The IRS said consumers should check the agency website for updated information about the stimulus payments.
If I don’t provide direct deposit info, will my check be delayed?
It’s possible, with The Associated Press reporting that some people without direct deposit information may not receive their checks until mid-August.
The IRS will start making direct deposits in mid-April for about 60 million taxpayers, the AP reported, citing a document from the House Ways and Means Committee. Paper checks will be issued starting the week of May 4, but it could take up to 20 weeks to send them all.
I owe child support. Will that impact my check?
Most likely, according to tax experts. Your check will probably be reduced by the amount you owe in child support, which will be deducted by the Treasury Department.
“If you are eligible for $1,200 but are $500 in arrears in child support, you’ll only get $700,” Gleckman noted.
Senator Chuck Grassley, a Republican from Iowa, wrote in a blog post that child support is the only type of overdue payment that will impact stimulus checks. The Treasury Department will check with U.S. states on overdue child support, he said.
I owe back taxes. Will that reduce my check?
No. The payments won’t be affected by taxes that you owe to the IRS or any other agency, Grassley wrote. “You will still get the full payment,” Gleckman said.
I am behind on student loans. Will that impact my check?
No, according to Grassley.
What if my income changes?
The checks are based on your income, with the full $1,200 payments going to single taxpayers who earn less than $75,000, or $2,400 to married households who earn less than $150,000.
The only reason your income could influence your stimulus check is if your annual adjusted gross income was above those thresholds for either 2018 or 2019, which is what the IRS will examine to determine your payment. For each $100 in income above that amount, your stimulus check will be reduced by $5. Individual taxpayers who earn more than $99,000 and married couples earning more than $198,000 will not get a relief check.
So if you earned above $75,000 as a single taxpayer in 2018 but your income dropped below that level last year, you may want to file your 2019 tax return as soon as possible to ensure you receive the entire $1,200.
Will I have to refund the money if my income rises? And will I owe taxes on it?
No, according to tax experts. Technically, the stimulus checks are tax credits advanced from your 2020 tax return. They are similar to other refundable tax credits, like the child tax credit, which aren’t considered income and which aren’t taxable.
“Moreover, if the credit amount you qualify based on 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back,” Grassley noted.
I am not required to file a tax return. Will I get $500 for any dependents?
No, according to the IRS. This applies to some Social Security recipients who aren’t required to file annual tax returns, which occurs when a person’s entire income comes from Social Security. Because the IRS said it will now rely on Social Security statements to automatically send the $1,200 to those seniors, it doesn’t have data on their dependents.
“Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time,” the agency said on its website.
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