KNOXVILLE, Tenn. — Stimulus checks are now coming in to people's bank accounts in the same format of a tax return.
We talked to Eric Foster, VP of PYA Waltman Capital, to answer your stimulus questions.
Who is getting this money first?
People who have their direct deposits set up through the IRS.
"They've told us that physical checks won't even start until the first week of May," said Foster. "So it seems they're going to try to knock out anybody that they can electronically first and then follow up with all the paper versions."
Is this taxable income?
"Stimulus money is technically an advance tax credit that would be on your 2020 tax return filed this time next year, so it is not taxable income," said Foster.
How do I get my check if I'm on social security?
"Anyone receiving social security payments doesn't have to do anything, that's a new change over the past 10 days or so," said Foster.
How do I know how much money will be in my stimulus check?
"The IRS is gonna base the amount of the stimulus check off of the most recent tax return so the good news is it's a pretty simple set of variables that dictate whether someone gets it. The income is on the tax return, the dependents are on the tax return and everyone knows the dates of birth so it should be a pretty easy equation to solve for the IRS"
What if I haven't filed taxes recently, or need to change my address or direct deposit information?
You will still get a stimulus check if you meet the financial requirements.
"The most common would be someone who's income would be too low to need to file a tax return," said Foster. "You can go to the IRS website. They have a simple form that is up that you can put in some basic information and that would allow the IRS to have your information and be able to process that stimulus payment to you."
Will I still get a stimulus check if I'm behind on child support payments?
"So child support from what the IRS tells us is the only type of delinquent payment that will have an impact on a stimulus check," said Foster.
Who gets the extra stimulus money for a child if divorced parents have joint custody?
"The child stimulus amount is going to go to the parent who claimed that child on the most recently filed tax return," said Foster.
How do I know I'm being contacted by the IRS and not a scammer?
"The IRS communicates in letters," said Foster. "You're gonna have people sending texts, making phone calls. You're gonna have people, scammers, telling you that if you pay a processing fee you can get your refund faster. None of that's true. The IRS doesn't reach out via text or phone. They do everything snail mail it's the easiest to document."
The IRS has the following questions and answers listed on their website:
For most taxpayers, payments are automatic, and no further action is needed. This includes taxpayers who filed tax returns in 2018 and 2019 and most seniors and retirees.
Who is eligible?
U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
- $75,000 and $99,000 if their filing status was single or married filing separately
- 112,500 and $136,500 for head of household
- $150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.
Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.
Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.
Who is not eligible?
Although some filers, such as high-income filers, will not qualify for an Economic Impact Payment, most will.
Taxpayers likely won't qualify for an Economic Impact Payment if any of the following apply:
- Your adjusted gross income is greater than
- $99,000 if your filing status was single or married filing separately
- $136,500 for head of household
- $198,000 if your filing status was married filing jointly
- You can be claimed as a dependent on someone else’s return. For example, this would include a child, student or older dependent who can be claimed on a parent’s return.
- You do not have a valid Social Security number.
- You are a nonresident alien.
- You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.
How much is it worth?
Eligible individuals with adjusted gross income up to $75,000 for single filers, $112,500 for head of household filers and $150,000 for married filing jointly are eligible for the full $1,200 for individuals and $2,400 married filing jointly. In addition, they are eligible for an additional $500 per qualifying child.
For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children are not eligible and will not receive payments.
Do I need to take action?
- People who filed a tax return for 2019 or 2018
No additional action is needed by taxpayers who:
- have already filed their tax returns this year for 2019. The IRS will use this information to calculate the payment amount.
- haven’t filed yet for 2019 but filed a 2018 federal tax return. For these taxpayers the IRS will use their information from 2018 tax filings to make the Economic Impact Payment calculations.
- People who aren't typically required to file a tax return
Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate Economic Impact Payments of $1,200 to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group who don't need to take action.
For Social Security, Railroad retirees and SSDI who have qualifying children, they can take an additional step to receive $500 per qualifying child.
There are other individuals such as low-income workers and certain veterans and individuals with disabilities who aren’t required to file a tax return, but they are still eligible for the Economic Impact Payments. Taxpayers can check the IRS.gov tool - Do I Need to File a Tax Return? - to see if they have a filing requirement.
If you don’t have to file, use the "Non-Filers: Enter Payment Info Here" application to provide simple information so you can get your payment.
Payment recipients: watch for an IRS letter
For security reasons, the IRS plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is paid. The letter will provide information on how the payment was made and how to report any failure to receive the payment. If a taxpayer is unsure they’re receiving a legitimate letter, the IRS urges taxpayers to visit IRS.gov first to protect against scam artists.
Avoid scams related to economic payments, COVID-19
The IRS urges taxpayers to be on the lookout for scam artists trying to use the economic impact payments as cover for schemes to steal personal information and money. Remember, the IRS will not call , text you, email you or contact you on social media asking for personal or bank account information – even related to the economic impact payments. Also, watch out for emails with attachments or links claiming to have special information about economic impact payments or refunds.