- April 16, 2020
- Posted by: Orkun Ozkaymak, CPA, MBA
- Category: Blog
We have received many calls regarding stimulus payments and variety of scenarios. Please use the following information taken directly from the IRS’ website to understand how these payments are calculated, if you are eligible and how you can request your payment.
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Q1. Who is eligible to receive a Payment?
A1. You may be eligible to receive a Payment if you:
- Are a U.S. citizen or U.S. resident alien;
- Cannot be claimed as a dependent on someone else’s return;
- Have a social security number (SSN) that is valid for employment (valid SSN); and
- Exception: If either spouse is a member of the U.S. Armed Forces at any time during the taxable year, then only one spouse needs to have a valid SSN
- Have adjusted gross income below an amount based on your filing status and the number of your qualifying children.
Additional information about eligibility for the Payment can be found in the Get My Payment Frequently Asked Questions.
Q2. Will I receive a Payment if I do not make enough money to normally have to file an income tax return?
A2. Yes. Eligible retirees and recipients of Social Security retirement, disability (SSDI), survivors benefits, Railroad Retirement, or veterans benefits, as well as individuals who do not make enough money to normally have to file a tax return, are also eligible for the Payment. This includes those who have no income, as well as those whose income comes entirely from federal benefit programs, such as supplemental security income (SSI) benefits. No minimum income is needed for the Payment.
Requesting My Economic Impact Payment
Q3. I recently filed a tax return. What do I need to do to get a Payment?
A3. You DO NOT need to take any further action if you filed a federal income tax return for 2018 or 2019. If you already filed your tax return for 2019, the IRS will use this information to calculate the Payment amount. If you haven’t filed your tax return for 2019 but filed a 2018 federal income tax return, the IRS will use the information from your 2018 tax return to calculate the Payment amount.
Q4. I haven’t filed a tax return for 2018 or 2019 and don’t need to file tax returns for those years. I receive Social Security, SSI, or Railroad Retirement benefits. What do I need to do to get a Payment?
A4. You are not required to file a tax return and will automatically receive a $1,200 Payment if you received Social Security retirement, SSDI, survivors benefits, SSI, or Railroad Retirement benefits in 2019. You do not need to contact the IRS, Social Security Administration (SSA), or Railroad Retirement Board (RRB). The IRS will use the information from your 2019 benefits to generate a Payment to you if you did not file tax returns in 2018 or 2019. You will receive your Payment as a direct deposit or by mail, just as you would normally receive your federal benefits.
Q5. I haven’t filed a federal tax return for 2018 or 2019 and don’t receive Social Security retirement or any other federal benefits. What do I need to do to get a Payment?
A5. You have to provide basic information to the IRS to receive your Payment. The IRS urges you to take one of the following actions as soon as you can.
- You can use the Non-Filers: Enter Payment Info Here tool to provide simple information to the IRS so you can get your Payment. U.S. citizens and permanent residents can use this tool if they had gross income that did not exceed $12,200 ($24,400 for married couples filing jointly) for 2019 and were not otherwise required to file a federal income tax return for 2019, and didn’t plan to do so. This is the quickest way to get your payment.
- You can file a federal income tax return for 2019 with the IRS even if you receive non-taxable income or do not make enough money to normally have to file a tax return.
Have your bank account information available when you use the tool or file so you can get your Payment as quickly as possible. Otherwise, the IRS will mail your Payment to the address you provide.
Q6. I did not file a tax return for 2018 or 2019. How do I know if I am required to file a tax return?
A6. Use the IRS Interactive Tax Assistant (ITA) online tool that provides answers to tax questions. The Do I Need to File a Tax Return? tool can help you determine if you’re required to file a 2019 federal income tax return.
Answer the questions about your filing status, federal income tax withheld, and basic information to help you determine your gross income to see if you need to file a 2019 tax return. If you had no income or income under a certain amount, you are not required to file a tax return. If you are not required to file a tax return, the Non-Filers: Enter Payment Info Here tool is the fastest way to get your Payment.
Q7. I receive veterans benefits. Do I need to provide information to the IRS or file a tax return to receive a Payment?
A7. The IRS continues to explore ways to see if Payments can be made automatically to those who receive veterans disability compensation, pension, or survivor benefits from the Department of Veterans Affairs, but did not file a tax return for the 2018 or 2019 tax year. You can use the Non-Filers: Enter Payment Info Here tool now to quickly receive your payment or wait as the IRS continues to review automatic Payment options to simplify delivery for these veterans and their families.
Q8. Who should NOT use Non-Filers: Enter Payment Info Here?
A8. You should not use the Non-Filers: Enter Payment Info Here tool if any of the following apply:
- You already filed a 2019 tax return.
- You already received your Payment based on your 2018 or 2019 return, even if you did not receive the full amount, [for example, because you have a newly born child in 2020 who was not reported on your 2019 return)].
- Someone could claim you as a dependent on their 2019 tax return.
- You are married but will not be using the tool with your spouse. You must file a 2019 or 2018 tax return to receive your Payment separate from your spouse.
- You weren’t a U.S. citizen or U.S. permanent resident (green card holder) in 2019. Those who were resident aliens in 2019 because they satisfied the “substantial presence test” and qualify for the Payment must file a tax return to receive the Payment.
Q9. I need to file a tax return but am concerned about visiting a tax professional or local community organization in person right now to get help with my tax return. How long is the Payment available?
A9. Payments will be made throughout the rest of 2020. If you don’t receive a Payment this year, you can also claim it by filing a tax return for 2020 next year.
Q10. Will the IRS contact me about my Payment?
A10. The IRS will not call, email, or text you about your Payment. The IRS will not contact you to request personal or bank account information. Watch out for websites and social media attempts that request money or personal information and for schemes tied to Economic Impact Payments.
The IRS urges taxpayers to visit IRS.gov – the official IRS website – to protect against scam artists. The IRS has issued a warning about Coronavirus-related scams.
For security reasons, a letter about the Payment will be mailed to each recipient’s last known address within 15 days after the Payment is made. The letter will provide information on how the Payment was made and how to report any failure to receive the Payment.
Calculating My Economic Impact Payment
Q11. What is the amount of the Payment I will receive?
A11. Eligible individuals will receive $1,200. Two eligible individuals filing a joint return will receive $2,400. You will receive an additional $500 Payment for each qualifying child you claimed on your tax return being used to calculate your Payment who meets the following conditions:
- The child is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, your grandchild, niece, or nephew).
- The child is claimed as a dependent on your tax return.
- The child was under age 17 at the end of the taxable year.
- The child was a U.S. citizen, U.S. national, or U.S. resident alien.
- The child has a valid SSN or an Adoption Taxpayer Identification Number (ATIN)
Q12. What is the amount of my Payment if I haven’t filed a tax return for 2018 or 2019 and am receiving an automatic Payment based on benefits that SSA or RRB paid me in 2019?
A12. Your Payment is limited to $1,200. An additional $1,200 will be paid to your spouse if SSA or RRB also paid benefits to your spouse in 2019.
Because the IRS would not have information regarding your qualifying children, you will not receive the additional $500 Payment for any qualifying children unless you provide additional information to the IRS.
You must also provide additional information to claim the full $2,400 Payment with your spouse if your spouse didn’t receive benefits from SSA or RRB in 2019. Provide this information by using the Non-Filers: Enter Payment Info Here tool or by filing a federal income tax return. You must provide this additional information before your additional $1,200 Payment is scheduled.
Q13. Will my Payment be reduced if my income is too little or too much?
A13. Eligible individuals don’t need a minimum income for the Payment.
Eligible individuals don’t need a minimum income for the Payment.
However, for higher income individuals, the Payment amount is reduced by 5% of the amount that your adjusted gross income exceeds $75,000 ($112,500 for taxpayers filing as head of household or $150,000 for taxpayers filing a joint return), until it is $0.
The $1,200 Payment for eligible individuals with no qualifying children ($2,400 for married couples filing a joint return) will be reduced to $0 once adjusted gross income reaches the following thresholds:
- $198,000 for taxpayers filing a joint return
- $136,500 for taxpayers filing as head of household
- $99,000 for all others
Each of these threshold amounts increases by $10,000 for each additional qualifying child. For example, because families with one qualifying child receive an additional $500 Payment, their $1,700 Payment ($2,900 for taxpayers filing a joint return) will be reduced to $0 once adjusted gross income reaches the following thresholds:
- $208,000 for taxpayers filing a joint return
- $146,500 for taxpayers filing as head of household
- $109,000 for all others
Q14. I filed a joint return with my spouse. Will we receive a Payment if I have a valid SSN and my spouse has an IRS Individual Taxpayer Identification Number (ITIN)?
A14. No, when spouses file jointly, both spouses must have valid SSNs to receive a Payment with one exception. If either spouse is a member of the U.S. Armed Forces at any time during the taxable year, only one spouse needs to have a valid SSN.
If spouses file separately, the spouse who has an SSN may qualify for a Payment; the other spouse without a valid SSN will not qualify.
Q15. What is meant by a valid SSN required for a Payment?
A15. A valid SSN for a Payment is one that is valid for employment and is issued by the SSA before the due date of your 2019 tax return (including the filing deadline postponement to July 15 and an extension to October 15 if you request it) or your 2018 tax return (including extensions) if you haven’t filed your 2019 tax return.
If the individual was a U.S. citizen when they received the SSN, then it is valid for employment. If “Not Valid for Employment” is printed on the individual’s social security card and the individual’s immigration status has changed so that they are now a U.S. citizen or permanent resident, ask the SSA for a new social security card. However, if “Valid for Work Only With DHS Authorization” is printed on the individual’s social security card, the individual has the required SSN only as long as the Department of Homeland Security authorization is valid.
Q16. Is a child born, adopted, or placed into foster care in 2020 a qualifying child for the Payment?
A16. The Payment in 2020 will not include an additional amount for these children because the Payment in 2020 is based only on information from your 2019 or 2018 tax return. You may claim the child next year for an additional credit on your 2020 tax return.
Q17. I received an additional $500 Payment in 2020 for my qualifying child. However, he just turned 17. Will I have to pay back the $500 next year when I file my 2020 tax return?
A17. No, there is no provision in the law requiring repayment of a Payment. When you file next year, you can claim additional credits on your 2020 tax return if you are able to eligible for them, for example if your child is born in 2020. But, you won’t be required to repay any Payment when filing your 2020 tax return even if your qualifying child turns 17 in 2020 or your adjusted gross income increases in 2020 above the thresholds listed above.
Q18. I claimed my child as a dependent on my 2019 tax return. She is graduating from school in 2020. Will she receive her own Payment?
A18. No, your child will not receive a Payment in 2020 because you claimed her as a dependent on your 2019 tax return. She will not receive a $1,200 credit in 2021 if you can claim her as a dependent on your 2020 tax return.
However, if your child can’t be claimed as a dependent by you or anyone else for 2020, she may be eligible to claim a $1,200 credit on the 2020 tax return she files next year.
Q19. I claimed my mom as a dependent on my 2019 tax return. Will I receive an additional Payment for her or will she receive her own Payment?
A19. No, you will not receive an additional Payment amount for your mom because she is not your qualifying child under age 17. Your mom will not receive her own Payment because you claimed her as a dependent on your 2019 tax return. You mom will not receive a credit in 2021 if you can claim her as a dependent on your 2020 tax return.
Receiving My Payment
Q20. Is the Payment taxable as 2020 income?
A20.No, the Payment is not income and you will not owe tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 tax return next year.
A Payment also will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.
Q21. If I owe tax, or have a Payment agreement with the IRS, or owe other federal or state debts, will my Payment be reduced as an offset?
A21. No, with one exception. The Payment will be offset only by past-due child support. The Bureau of the Fiscal Service will send you a notice if an offset occurs.
If you are married filing jointly and you filed an injured spouse claim with your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), half of the total Payment will be sent to each spouse and your spouse’s Payment will be offset only for past-due child support. There is no need to file another injured spouse claim for the Payment.
Q22. How will the IRS know where to send my Payment?
A22. If you received direct deposit of your refund based on your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), the IRS has sent your Payment to the bank account provided on the most recent tax return. If you filed a Form 8888, Allocation of Refund, with your tax return to split your refund into multiple accounts, your Payment was deposited to the first bank account listed. You cannot change your account information.
If you filed your 2019 or 2018 tax return but did not receive your refund by direct deposit, your Payment will be mailed to the address we have on file even if you also receive Social Security or Railroad Retirement benefits by direct deposit. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS).
If you did not receive your refund by direct deposit based on your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), you have the opportunity to provide bank account information through the IRS Get My Payment tool before your Payment is processed. Direct deposit is the fastest way to receive your Payment.
Q23. What if the bank account number I used on my recent tax return is closed or no longer active? Can I switch and be mailed a Payment?
A23. If the account is closed or no longer active, the bank will reject the deposit and you will be issued a check that will be mailed to the address we have on file for you. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS). You do not need to call the IRS to change your Payment method or update your address at this time.
As required by law and for security reasons, a letter about the Payment will be mailed to each recipient’s last known address within 15 days after the Payment is made. The letter will provide information on how the Payment was made and how to report any failure to receive the Payment.
Q24. I already filed my 2019 tax return and owed tax. I scheduled a Payment (electronic funds withdrawal, Direct Pay, or Electronic Fund Transfer Payment System (EFTPS)) from my bank account. Will the IRS send my Payment to the account I used?
A24. No, the IRS will not send Payments to accounts used to make a payment to the IRS. After you properly verify your identity, the Get My Payment tool will allow you to submit your bank account information if your Payment has not been processed. Providing your bank information is the fastest way to receive your Payment. If we do not have bank information for you, your Payment will be mailed to the address we have on file for you.
Q25. I already filed my 2019 tax return, but I didn’t provide bank information. Can I use the Non-Filers: Enter Payment Info Here tool to provide my banking information?
A25. No, the Non-Filers: Enter Payment Info Here tool cannot be used if you already filed a 2019 tax return. Use the Get My Payment tool to provide your banking information or learn the status of your Payment.
Q26. How do I find the bank account information the IRS needs?
A26. You can find this information on one of your checks, through your online banking applications, or by contacting your financial institution directly. Make sure to enter the routing number, account number, and account type (checking or savings) correctly.
Q27. What if I don’t have a bank account?
A27. We will mail your Payment to the address we have on file for you. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS).
Q28. My address is different from the last tax return I filed. How can I change my address?
A28. To change your address:
- If you have not filed your 2019 tax return, enter your new address on your tax return when you file. When your tax return is processed, we’ll update our records.
- If you have filed your 2019 tax return and you do not receive direct deposit of your refund, your Payment will be mailed to the address we have on file for you. This is generally the address on your most recent tax return or as updated through the United States Postal Service (USPS).
- The change of address must be processed before we schedule your Payment.
Q29. Where did you get the bank information for me, and what if I need to change it?
A29. Your bank account information is obtained from the most recently filed tax return or from our Get My Payment application if you provided the information through it. If Get My Payment indicates your Payment has been processed, you cannot change your bank account information.
If you haven’t filed a 2018 or 2019 tax return and you received a Form SSA-1099 or Form RRB-1099, your bank account information may be obtained from SSA. You will receive your Payment as a direct deposit or by mail, just as you would normally receive your benefits. You will not be able to use Get My Payment to provide your bank account information.
Q30. I requested a direct deposit of my Payment. Why are you mailing it to me as a check?
A30. It is possible we do not have the correct bank account information for you, or your financial institution rejected the direct deposit. In either case, your Payment will be mailed to the address we have on file for you.
More About the Economic Impact Payment
Q31. As a U.S. citizen living abroad, am I entitled to a Payment?
A31. Yes, U.S. citizens living outside the country are eligible for the Payment. Anyone eligible to file Form 1040 or Form 1040-SR is an eligible person if they have a valid SSN and can’t be claimed as a dependent of another taxpayer. Nonresident aliens who file or would file Form 1040-NR or Form 1040-NR-EZ are not eligible for the Payment.
Q32. If I live in Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam, or the Commonwealth of the Northern Mariana Islands, will I get a Payment if I’m eligible?
A32. In many cases, the answer is yes. But special rules in the law apply to these five U.S. territories (possessions). In general, the tax authorities in each territory will make Payments to eligible residents. People in these territories with questions about the Payment should contact their local tax authority.
Q33. Will I get the Payment if I am not a U.S. citizen, U.S. permanent resident, or a resident of these territories?
A33. U.S. resident aliens with a valid SSN are eligible for the Payment if they can’t be claimed as a dependent of another taxpayer. Determine if you are considered a U.S. resident alien at Aliens – Which Form to File. If you are eligible to file Form 1040 or Form 1040-SR like U.S. citizens for 2019, including by filing a joint federal tax return with a U.S. citizen or U.S. resident alien spouse, file Form 1040 or Form 1040-SR with the IRS for 2019 even if your income isn’t enough to require you to file a tax return. You don’t need to take any action if you already filed a Form 1040 or Form 1040-SR for 2019 or 2018.
If you are considered a U.S. resident alien for 2020 but not for 2019, you can claim the Payment when you file Form 1040 or Form 1040-SR with the IRS for tax year 2020.
If you are considered a U.S. resident alien for 2019 but not for 2020, you won’t be required to repay the Payment we paid in 2020 based on your Form 1040 or Form 1040-SR for tax year 2019.