Coronavirus Stimulus Checks

Coronavirus Tax Rebate Checks!

Congress is planning to send checks or direct deposits to families to help relieve some of the financial burdens the coronavirus shutdowns have caused. The government has voted to send checks to certain families of up to $1,200 per person plus $500 per child aged 16 or younger. The checks are limited based on income. Single taxpayers who earned $75,000 or less will be eligible, while married couples can earn up to $150,000 to receive the full benefits. If your income surpasses these limits, your rebate will be gradually reduced by $5 for every $100 you earned over the limit.

​The income limits will be based on either your 2018 tax return or your 2019 if you’ve already filed it. While the government has suggested that these payments could be delivered in as little as three weeks after the bill is signed into law, many experts believe this will be extremely difficult to accomplish.  The rebates will be directly deposited to an account on file if you have authorized a tax refund or other government payment direct deposit sometime after January 1, 2018.

Coronavirus Rebate Key Points:

• You must have filed a 2018 or 2019 tax return unless you are receiving Social Security.
• You, your spouse, and any dependents must have a valid Social Security number.
• You must not have been claimed as a dependent on your most recently filed return.
• Your rebate will be direct deposited if you requested direct deposit of a tax refund any time after January 1, 2018.
• Rebate checks that are mailed may take months longer than direct deposit.
• The IRS will send a letter to your address of record within 15 days of distributing payment.
• Rebate payments are not subject to seizure for past due taxes unless you owe child support.
• If you recently moved, file form 8822 with the IRS to update your address.
• Rebate checks are not taxable income.

Stimulus Rebate Maximization Strategies

If you have not yet filed your 2019 tax return you may need to be strategic about when you file and who you claim. Consider these three scenarios:

1. Think twice about claiming college students or young adults as dependents. If they are working, they could be eligible for their own $1,200 rebate, but they’ll lose that rebate if you claim them.

2. If you had a new child in 2019, you’ll probably want to file your return right away to ensure you receive the additional $500 child rebate.

3. Because your rebate will be calculated based on your 2018 OR 2019 return, you may benefit from holding off on filing your 2019 return, or you may want to file your 2019 return as soon as possible. If your income is close to the phase-out limit, compare your 2019 income to your 2018 income. If your 2018 income is significantly lower than 2019, you may want to delay filing your 2019 return. However, if your 2019 income is lower than your 2018 income, you may want to file your 2019 tax return as soon as possible.