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.

Who qualifies for the COVID-19 Stimulus Checks?

by Mounica Kota | Apr 30, 2020 | COVID - 19, single tax filing, Stimulus check, Tax returns Jointly

Who qualifies for the COVID-19 Stimulus Checks?

On 27th March 2020, the US President Donald Trump had signed the CARES (Coronavirus Aid, Relief, and Economic Security) Act into law. This CARES Act also led to the initiation of a $2 billion Stimulus package which can be said as the largest emergency relief bill passed in the history of America so far.

A part of this Stimulus package includes cash payment to the eligible Americans which has been termed as “Stimulus Check” by common people and as “Economic Impact Payment” by the IRS. Technically, Stimulus checks is an advanced tax credit meant to offset an individual’s federal income taxes for 2020.

So, now there are numerous queries related to the eligibility of obtaining Stimulus checks popping up in the minds of the Americans.

Who is eligible to obtain Stimulus checks?

The basic eligibility for obtaining Stimulus checks from the US Government can be summarized below.

You must be a US citizen or a US National or a US resident alien.
You must not have been claimed as a dependent on the tax return of someone else.
Your Adjusted Gross Income (AGI) in 2018 or 2019 should be below the threshold for your filing status.
You should have filed a tax return for the year 2018, 2019 or should have Social Security Benefit Statement, or Form SSA-1099, or Form RRB-1099 or Social Security Equivalent Benefit Statement.

The Stimulus Check payment which would be obtained as per the AGI threshold can be summarized as below.

a.A single individual or married but filing tax returns separately

If your Adjusted Gross Income (AGI) is below $75,000 then the Stimulus Check received would be an amount of $1200.
In case of your Adjusted Gross Income (AGI) being more than $75,000, the amount received as Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $75,000.
You would also receive an additional $500 for each qualifying child who is below the age of 17 years.
In case your AGI is above $99,000 and no qualifying children are claimed, there would be no Stimulus Check obtained.

b.Married couples filing tax returns jointly

If you are married and filing tax jointly with an AGI which is less than $150,000 the Stimulus Check received would be $2400.
In case the AGI is more than $150,000 the Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $150,000.
You can also obtain an additional $500 for each qualifying child who is below the age of 17 years.
In case the AGI is above $198,000 and no qualifying children are claimed, there would be no Stimulus Check obtained.

c.Individuals filing tax returns as the “Head of Household”

1. In this case, if the AGI is less than $112,500 the Stimulus Check received would be $1200.

2. In case the AGI lies in between $112500 and $136500 the Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $112,500.

3. You would obtain an additional $500 for each qualifying child who is below the age of 17 years.

4. In case the AGI is above $136,500 and no qualifying children are claimed, there would be no Stimulus Check obtained.

Qualifying criteria for a dependent to receive the Stimulus payment

You must be claiming your dependents in case of your tax returns.
Your dependents must be below the age of 17 years.
Your dependents should be a US national or a US citizen or a US resident alien.
They must be related to you either by blood, marriage or by adoption.
Your dependents must have lived with you for at least half of the year.

Moreover, some more additional information related to the qualifying criteria of dependents can be noted below.

Your dependent must have a valid Social Security Number (SSN) to qualify for the receipt of Stimulus payment.
There is no limit on the number of dependents who can be eligible for obtaining the additional $500 in Stimulus check from a particular household.
In case you are claiming your child as a dependent and your child also files his tax then he would be qualifying for an additional $500 payment as your dependent. He would not be considered eligible for his Stimulus payment.
In case you have not filed your 2019 tax return and your dependent was 16 years while filing 2018 returns, then he is eligible to obtain the $500 Stimulus payment.

Hence, with the Stimulus Checks being an effective method to overcome the financial crisis caused by COVID-19 it is advisable to file your 2019 tax returns soon if you have not done so yet.

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.