All you need to know about Stimulus Payment
All you need to know about Stimulus Payment
The US President has signed a relief package of $2 trillion known as the Stimulus package which intends to provide relief to individuals and businesses that have been financially hit due to the outbreak of COVID-19. This Stimulus package would include sending of stimulus checks to most of the Americans, paid sick leave, unemployment benefits, student debt relief for a temporary period, etc. to alleviate the impact caused by the COVID-19.
Eligibility to obtain Stimulus payment
Mostly, all Americans would qualify to obtain some amount of money in the form of Stimulus payment. To obtain Stimulus payment, an individual should be having your Social Security Number and should not be dependent of someone else.
a.Individuals with a single filing status and having an adjusted gross income (AGI) of $75,000 or less would receive the full Stimulus payment of $1200.
When the AGI is above $75,000 then the Stimulus payment would reduce by $5 for every $100 income above $75,000. If an individual is earning more than $99,000 in a year then he is not eligible to obtain Stimulus payment.
b.Married couples who have an AGI of $150,000 or less are eligible to obtain the Stimulus payment. This payment would be $2400 for the married couples. If a couple has an AGI which is more than $150,000 and up to $198, 000 then the Stimulus payment reduces by $5 for every $100 rise in income above $150,000. Those couples who have an AGI of more than $198,000 are not eligible for obtaining Stimulus payment.
c.Those filers who are classified as ‘Head of Household’ and have an AGI of up to $112,500 are eligible to obtain Stimulus payment of $1200. If the ‘Head of Household’ filers has an AGI of up to $136,500 then reduced Stimulus payment would be available in those cases. Also, those ‘Head of Household’ filers who earn more than $136,500 is not eligible for obtaining Stimulus payment.
d.If you have children who are below the age of 17 years then you can receive an extra $500 for each child as the Stimulus payment.
Furthermore, according to an announcement made by the Treasury Department on 1st April 2020 those individuals who are on Social Security do not need to file a tax return for obtaining their Stimulus payment. Their Stimulus payment would be generated by reference to their Form SSA-1099 and Form RRB-1099. This is applicable for the senior citizens, railroad retirees and Social security recipients who do not file tax returns otherwise.However, if an individual is not on Social Security and does not have any income then he needs to file tax returns for obtaining Stimulus payment.
How to obtain the Stimulus payment?
Mostly, there is nothing much to be done by individuals for obtaining the Stimulus payment. If an individual has already filed his tax returns for 2019, then the Federal Government can easily calculate the Stimulus payment and send it. But, those individuals who have not filed their Income tax returns for 2019 must do it immediately to obtain the accurate Stimulus payment. In case, if an individual does not file his tax return for 2019 then the IRS would use the 2018 AGI for determination of the payment which must be done as Stimulus payment.
Retirees can receive their Stimulus payment in the same way as they receive their Social security benefits i.e. by referring to Form SSA-1099. If an individual does have to file a tax return and does not receive Social Security benefits as well, then he can obtain his Stimulus payment by using the ‘Tax Act’s Stimulus Registration’. This can be used to file the Stimulus only return for submission of the necessary information.
How and by when the Stimulus payment would be received?
The Federal Government would send the Stimulus payment to the individuals by direct deposits. This would make the process faster. However, for those taxpayers who do not have the direct deposit option, the payment would be done by sending paper checks. The Government has started the Stimulus payments on 11th April 2020. According to the latest information, around 80 million payments have been already initiated and the process is going on in full fledge.
Additional information on Stimulus payment
- The Stimulus payment received by individuals an advance refund or refundable credit based on the income of 2020 and is not taxable.
- The Stimulus payment will not affect an individual’s refund for 2019 or the anticipated refund for 2020. Moreover, the IRS guidelines also ensure that even if an individual has obtained more Stimulus payment than the amount he qualifies based on his 2020 return he will not have to pay back any money.
- If an individual has filed his 2019 return without using a direct deposit, he can use the web portal ‘Get My Payment’ to update the direct deposit information for obtaining Stimulus payment.
Hence, in these times of distress caused by the COVID-19 the Stimulus payments or otherwise known as Economic Impact Payments are sure to work as a support for the Americans who have been struggling lately due to economic disruption.