All you need to know about the Stimulus Package Relief for the deceased

by Mounica Kota | Jul 5, 2020 | coronavirus, coronavirus stimulus checks, Deceased persons

All you need to know about the Stimulus Package Relief for the deceased

Millions of people across the United States have already received their payments from the Coronavirus relief package and many are still waiting for their stimulus payments to arrive. However, a surprising fact which has come up into light is the receipt of stimulus payments by the deceased Americans. The beneficiaries of these deceased Americans have been receiving the stimulus payment and are in a dilemma about the next course of action.

The CARES Act was passed by Congress in March and since then there has been huge pressure on the IRS for the quick distribution of the Stimulus money amongst the people. This scenario of deceased persons receiving the Stimulus money has also been addressed by the US President as quite a normal happening which would be taken care of by the IRS eventually.

How are the deceased Americans receiving coronavirus stimulus checks?

If an American had filed his tax returns for the year 2018 or 2019 and has passed away then his beneficiaries might be receiving the Stimulus payments. The major reason underlying this is the use of the recent tax information by the IRS to determine the eligibility for the receipt of the Stimulus payment.

There is a master file of all deaths that have happened in the country with the Social Security Administration.

IRS could have cross-referenced with this master file and scrubbed the data for removing the names of the deceased individuals from the list of Stimulus check recipients. However, this would have taken a longer duration and the Stimulus payments would have been delayed for all Americans. Precisely, many tax and law consultants have stated that the IRS has followed the law because according to law the IRS needs to look at what has been reported by the taxpayer in his 2019 returns, his income, and his filing status. The payment would be based on these eligibility criteria and not on whether the taxpayer is deceased or not.

What to do if you receive a Stimulus check for your deceased relative?

The IRS FAQ page on its official website gives detailed information on what needs to be done if you are receiving the Stimulus payment for any of your deceased relatives or family member.

Based on the IRS’s instructions about repayments, any stimulus amount obtained for a person who had died before the receipt of the payment should be returned. However, there is a small exception in this case as well. In case, you are married and had filed your income tax returns jointly but your spouse had passed away before the receipt of the Stimulus check then you are entitled to return only that portion of the payment which was intended for your spouse and keep your portion of the payment. The amount which you need to return would be $1200 unless your joint AGI (Adjusted Gross Income) was more than $150,000.

How to return the Stimulus payment received for a deceased relative?

If you have received Stimulus payment for any of your deceased relatives and wish to return the payment, then you must follow the instructions specified by the IRS.

a. Payment received as paper check which has been cashed or payment received by direct deposit

You need to send a money order or a personal check to the appropriate IRS location in the state in which you are residing. The ‘Economic Impact Payment Information Center’ can be referred to obtain the mailing address on which the money order or check would be sent.
You need to mention ‘Payable to US Treasury’ on the money order or check. You must also mention the 2020 EIP and the Social Security Number or Taxpayer Identification Number of the person to whom the check had been addressed.
You should give a summary of the reason for which you are returning the check.

b.Payment received as a paper check but has not been cashed

If you have not cashed the check, then you need to mention ‘Void’ on the endorsement section of the backside of the check received.
You can mail the voided Treasury check to the appropriate mailing address of the IRS location.
You can put in a note which explains the reason for your return of the check.

Conclusion

Despite all the understanding about the return of the check, it can be said that the need to return the Stimulus payment made for a deceased person has not been officially stated in the IRB (Internal Revenue Bulletin). This has only been said in the FAQs of the IRS and the IRS may change its regulation at any time.

Does the Stimulus package help in Tax Refunds for the NRIs in the US?

by Mounica Kota | Jul 2, 2020 | federal government, Government Benefits, Stimulus payment, Tax Refund

Does the Stimulus package help in Tax Refunds for the NRIs in the US?

The Federal Government had been sending Stimulus checks to millions of Americans including the NRIs to alleviate the financial and economic stress created by the pandemic COVID-19. These stimulus checks have been of great help to those NRIs who have been struggling to meet their basic expenses due to either loss of work or business shut down because of COVID-19.

If you are an NRI and have also received the Stimulus check, an obvious thought in your mind must be about the co-relationship between the Stimulus package and your tax refunds. There is a relationship between the Stimulus check you have received and your income tax; however, by the receipt of Stimulus check your tax refund would neither be decreased nor would your tax liability be increased.

How are Stimulus checks and Income taxes related?

The IRS is in charge of sending out the Stimulus checks to the NRIs and even it is the IRS that is responsible for all decisions associated with tax refunds and collection of payments for NRIs.This reason might cause apprehensions in your mind especially when you are an NRI and owe to pay taxes to the IRS.

However, you do not need to worry about your taxes about the receipt of the Stimulus checks. The Stimulus money is not considered as taxable income.

The Stimulus check you receive is not going to increase the amount of tax you owe to pay to the IRS while filing your tax returns for 2020. It is also not going to decrease your tax refunds to be obtained for the year 2020. The involvement of IRS and your tax filings are only involved here because of the reference they provide to your income which is a major factor in the determination of your Stimulus amount.

Your amount of Stimulus check would be calculated based on your federal tax return for the year 2018 or the year 2019. If your 2019 tax returns have been filed, then that would form the basis for the calculation of your stimulus payment otherwise the IRS would be using your tax return information of the year 2018. If you do not receive your Stimulus payment this year, you would be able to claim it next year while filing 2020 tax returns.

There might be a scenario in which your income has changed tremendously over the recent period. In such a case, the working procedure can be summarized as mentioned below.

In case of your income being lower than that of your income in 2018 or 2019, the IRS would calculate your Stimulus payment based on your income of the year 2020. In this case, your Stimulus payment would be received after your income tax returns for the year 2020 are filed.
If your income is on the higher side in 2020, then the IRS would not force you to pay back your Stimulus money and you would not even lose any money from your 2018 or 2019 refund.

In case of tax non-filers

If you have not filed your tax returns recently then

If you are the recipient of Social Security benefits or are a military/railroad retiree then you can obtain Stimulus payment without the need to file your income tax returns.
If you have not filed tax returns for 2018 or 2019 and have not received any federal benefits, you can obtain your Stimulus checks by filing the tax returns for 2019 or by using the IRS tool for non-filers.

Stimulus Payment- An advance on the tax refund or a Government benefit

a. Stimulus payment is not an advance income tax refund and it is not going to affect your tax refunds based on your 2019 or 2020 tax returns. Moreover, you will not have to pay back the Stimulus money.

b.Stimulus payment can be said to be a federal tax credit for 2020 or an advance of a refundable credit on your 2020 tax returns and can also be referred to as Stimulus rebate.

In case of this rebate, you would receive the payments immediately rather than waiting till next year unlike the Federal child tax credit or Earned Income Tax credit.

c. Your eligibility to receive Social security benefits or Unemployment benefits would not affect your Stimulus payment receipt.

Can Stimulus payment be seized?

Suppose you owe money to the Federal Government in the form of back taxes or student debt loans, your Stimulus payment would be safe by the process known as Federal offset.
But, the Federal Government can be able to take a portion of your entire Stimulus payment if you are overdue on Child support payments.
Some cases in which your Stimulus check can be seized are court orders to make certain payments through debt collectors or if you owe money to bank/credit unions in cases like an overdue auto loan, an overdrawn account, or a delinquent personal loan.

Conclusion

Hence, in these difficult times caused by the novel coronavirus, the Stimulus payments can be considered as a support system for those NRIs who are facing a financial crisis. You must remain informed about the various aspects related to the Stimulus payment and try to resolve your queries with the IRS in case of delay or troubles in obtaining your Stimulus check.

What to expect in the Second Stimulus Check?

by Mounica Kota | Jun 25, 2020 | COVID - 19, HEROS act, Second Stimulus Check, Stimulus check

What to expect in the Second Stimulus Check?

The US Legislation has passed a relief package of $3 trillion known as the HEROES Act n 16th May 2020. By now, most of the Americans have received their stimulus check associated with the CARES Act and there has been a declaration of an official recession. The rate of unemployment across the country has increased exponentially making it quite necessary for another round of Stimulus payment.

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would help the American households in obtaining another round of Stimulus payments. The Heroes Act would be offering larger stimulus payment to the Americans than that offered by the CARES Act. This bill is currently with the Senate House and has been passed successfully by the Democrat-controlled House.

The need for the Second Stimulus Check

The need for the second Stimulus check by the Americans is quite justified as the pandemic COVID-19 has caused huge losses to the health and the economy of the Americans. Millions of Americans have lost their jobs and there are speculations for further loss of millions of jobs in the US. However, some reports have stated the information about the steady lowering in the unemployment rate in the US. The unemployment rate in the US has dropped by 1.4% from April and there have been around 2.5 million jobs added back since March. This can be considered as a major reason for the Senate to reject this bill of the Second Stimulus Check.

Eligibility to obtain the Second Stimulus Check

If a taxpayer was eligible for obtaining the first Stimulus check then he would be eligible for obtaining the Second Stimulus check. According to the most recent tax returns filed by a taxpayer, people who earn less than $75,000 would be obtaining $1200 whereas married couples can earn $2400 as Stimulus payment.

The age restriction for qualifying as a dependent was set as below 17 years by the CARES Act whereas the HEROES Act has removed this qualifying criterion. Moreover, those taxpayers who have an earning up to $100,000 in a year would receive a prorated amount as Stimulus payment.

Money to be obtained with the second stimulus check

Every member of a household would be receiving $1200 inclusive of the children as well. Those taxpayers who are filing their tax returns with the single status and have an earning less than $75,000 would receive the entire payment. This income threshold is $150,000 for those taxpayers who are married and are filing their tax returns jointly.
Under the Heroes Act, the total payment for one family would be capped at $6,000.

Provisions for Older students under the HEROES Act

Under the CARES Act, dependents whose age was below 17 years would be eligible for the receipt of the $500 payment. This excluded many high school students, seniors, and many other college students who were already claimed as dependents on their parent’s tax returns from obtaining the Stimulus Check.
However, the HEROES Act ensures that all dependents who might be college going students or teenagers would receive the Stimulus Check of $1200.

Provisions for Immigrants to obtain the second Stimulus Check

The CARES Act needed an American to have a Social Security Number as a mandate for obtaining the Stimulus payment. However, the HEROES Act needs a taxpayer to only have the Taxpayer Identification Number (TIN) to obtain the Stimulus check.

The Taxpayer Identification Number is used by the immigrants to pay their taxes and thus, it is feasible for the immigrant taxpayers to obtain the Second Stimulus check.

By when would the Second Stimulus Check be received?

It is quite uncertain as to by when the Senate would be considering the Second Stimulus Check payments. However, it has been estimated that the Stimulus Checks would reach the Americans early this time as compared to that of the CARES Act. Millions of Americans have verified their information on the “Get My Payment” site of the IRS and this would make the payments faster this time. According to experts, if the bill takes another two weeks for approval then the Americans would be seeing their payment for the Second Stimulus Package by the end of July or early of August.

Hence, with the impact of the pandemic intensifying daily this initiative by the US Government would be of real help to the Americans in overcoming the economic crisis caused by the pandemic COVID-19.

References

https://www.cnet.com/personal-finance/second-stimulus-check-how-much-you-could-get-when-could-payments-come-latest-news/ https://www.cnet.com/personal-finance/second-stimulus-check-how-much-you-could-get-when-could-payments-come-latest-news/

https://www.cbsnews.com/news/second-stimulus-check-how-much-when-heroes-act/

https://www.tomsguide.com/news/stimulus-check-2-update-senate-vote-date-eligibility-and-latest-status

https://www.forbes.com/sites/terinaallen/2020/05/11/the-2000-second-stimulus-check-what-americans-say-about-it/#4e78ee53514f

Do I need to file my taxes to be eligible to receive a Stimulus check?

by Mounica Kota | Apr 16, 2020 | CARES, COVID - 19, federal government, Form RRB 1099, IRS, Stimulus payment

Do I need to file my taxes to be

eligible to receive a Stimulus check?

In the US, the Federal Government had passed the CARES (Coronavirus Aid Relief and Economic Security) Act to bring some relief to the Americans who are struggling due to the outbreak of COVID-19. Under the CARES Act, the IRS announced that a Stimulus check would be issued to the individuals in the US for financial relief up to some extent.

According to the IRS, most of the Americans would be receiving their Stimulus checks automatically based upon the 2019 tax returns. The information of the 2018 tax returns would be considered if the 2019 tax returns have not been filed by an individual. The Stimulus payments would be done by the Direct Deposit method as it would help in sending the money faster.

Who is eligible to obtain the Stimulus payment?

The majority of the American population would qualify to receive the Stimulus payment. The size of the Stimulus payment would depend on the Adjusted Gross Income (AGI) of the individuals.

For an individual who is filing his tax returns as a single filer and is having AGI below $75,000, the Stimulus payment received would be $1200. He would also receive an additional payment of $500 if he would claim a dependent below the age of 17 years. If the AGI of the single filer is above $75,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $75,000. Also, if the AGI of the individual is above $99,000 and no dependents are being claimed then the individual would not receive any Stimulus payment.

For married couples filing their tax returns jointly and are having an AGI below $150,000, the Stimulus payment received would be $2400. They would also be eligible to receive an additional payment of $500 by claiming a dependent below the age of 17 years. If the AGI of the couple is above $150,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $150,000. Also, if the AGI of the individual is above $198,000 and no dependents are being claimed then there would be no Stimulus payment received.

Need to file tax returns to obtain Stimulus payment

Let us talk about those instances where the filing of tax return is necessary to obtain the Stimulus payment.

Self-employed individuals who have a net income of $400 or more must file their tax return as they would have to pay self-employment taxes on the income of $400 or more.
Those taxpayers whose income is more than the income filing threshold as determined by the IRS need to file their tax returns for obtaining the Stimulus payment. This income filing threshold determined by IRS is $12,200 for single filers, $24,400 for married couples who are filing their tax returns jointly and $18,350 for filers filing returns as ‘Head of Household’.
Those dependents who have an unearned income of more than $1,100 and earned income more than $12,200 must file their tax returns for receiving the Stimulus payment.
If an individual owes taxes on an IRA or Health Savings Account he will have to file his tax returns for obtaining the Stimulus checks.
If an advance payment of the health coverage tax credit has been received by an individual, then he must file his tax returns.

Situations which rule out the need to file tax returns for receiving Stimulus payment

a.Social security recipients and the Railroad retirees who have not filed their tax returns for the year 2019 or 2018 do not need to perform any additional paperwork like filing a tax return for obtaining the Stimulus payment. The IRS would use the information from Form SSA-1099 and Form RRB-1099 respectively to obtain the information needed to send the Stimulus payment.

b.Those Americans who belong to the lower-income group or who have income below the tax filing threshold of IRS and have not filed tax returns for 2019 or 2018 must use the new web tool of the IRS. By using this tool, individuals can enter their basic information like Name, Address, SSN, Dependents, etc. This information would help in calculating and sending the Stimulus payment.

c.Recipients of Supplemental Security Income (SSI) will obtain their Stimulus payments automatically without the need for filing the tax returns. However, if they have qualifying dependents below the age of 17 years must use the web tool of IRS to claim the additional $500 payment. This is also applicable for the Railroad Retirees and Social Security beneficiaries.

Hence, taxpayers don’t need to file tax returns for obtaining the Stimulus checks. It mainly depends upon the circumstances which determine the need to file the returns.

References

All you need to know about Stimulus Payment

by Mounica Kota | Apr 13, 2020 | AGI, COVID - 19, federal government, SSA 1099, 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.