5 Things To Know About The COVID-19 Stimulus Payments

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The federal government is providing stimulus checks to Americans in the coming weeks.


The harsh economic consequences of the COVID-19 pandemic and the widespread shutdowns needed to contain it are starting to set in. 

Millions have filed for unemployment and millions more will. In an effort to keep financially distressed Americans afloat, Congress has responded with a $2 trillion stimulus package, known as the Coronavirus Aid, Relief and Economy Security (CARES) Act.

One of the most widely anticipated provisions of the stimulus package: payments to individuals that will begin showing up in their bank accounts within the next few weeks. (Those who don’t have a bank account on file with the Internal Revenue Service will likely have to wait a little longer to be mailed paper checks.)

Here are five things to know about the stimulus payments:

1. There are income requirements to qualify

There are three dollar figures to be aware of in terms of the stimulus payments: $1,200 will be given to individual taxpayers, $2,400 will go to married couples filing jointly, and families will receive an additional $500 per qualifying child under the age of 17. Those numbers apply to individuals with adjusted gross income (AGI) up to $75,000, married couples filing jointly with AGI up to $150,000 and heads of households with AGI up to $112,500. Keep in mind that AGI will be based on your 2019 tax return, or 2018 if you haven’t filed yet. (You can see advice here on whether it makes sense to rush to file your 2019 return.) 

Groups that make more than those AGI figures start falling into the “phase out” category, which means the stimulus amount granted goes down as AGI goes up. Individuals and households will be paid $5 less per every $100 they make over the limits. The total phase out amounts, meaning the AGI is too much to qualify for a stimulus check, are $99,000 for single filers and $198,000 for married couples filing jointly, or $136,500 for heads of households.

To give you an idea of how the phase out works, here are estimates of stimulus amounts for different filing statuses and income amounts. Keep in mind that each qualifying child under the age of 17 will add an additional $500 to these stimulus amounts. The payment for children begins to phase out (at the same $5 per $100 of income), after the payment to adults has completely phased out. 

Single filer   

  • $80,000 AGI: $950 stimulus 
  • $85,000 AGI: $700 stimulus
  • $90,000 AGI: $450 stimulus

Married filing jointly

  • $160,000 AGI: $1,900 stimulus
  • $170,000 AGI: $1,400 stimulus
  • $190,000 AGI: $400 stimulus

Head of Household:

  • $115,000 AGI: $1,075 stimulus
  • $120,000 AGI: $825 stimulus
  • $130,000 AGI: $325 stimulus

If you don’t want to do the math yourself to estimate how much your stimulus amount might be, the Forbes’ Stimulus Check Calculator will calculate it for you. The only information you’ll need to provide is your filing status, income and how many child dependents you claimed. 

2. If you don’t qualify based on previous tax returns, you can still qualify when you file your 2020 return

Some who already filed their 2019 taxes, but now find themselves unemployed, might be reeling at the idea of not receiving aid in their time of need. However, there is a provision in the stimulus bill that will ensure these people get a stimulus check—it just won’t be immediate.

If your income suddenly drops this year due to unemployment, or much lower hours or gigs than you worked the year prior, you’ll be able to claim the stimulus on your 2020 tax return. 

That’s not necessarily helpful for individuals who are without income right now, but don’t qualify for the stimulus check on their 2019 taxes. If you need financial assistance now, some banks are offering financial assistance to customers experiencing financial hardship due to COVID-19, including payment arrangement programs, mortgage relief and more. Additionally, the Department of Education is suspending some federal student loan payments, without interest, until the end of September

These relief systems won’t put money in your pocket now. But they could keep you afloat in the meantime while you search for a work from home job or gig, since most of the country is ordered to shelter in place right now, or successfully file for unemployment.  

Another thing to keep in mind: while the stimulus checks are technically an advance refund on 2020 taxes, if you miraculously make more money this year and end up in the phase-out category, it appears you won’t have to return the money to the government. 

3. You will be notified after your payment is disbursed

Stimulus checks will be direct deposited into the bank account listed on 2019 tax returns (or 2018, if you have yet to file for last year). If no bank account is listed on either return, the IRS will send a physical check to your most recent address on file.

But what if your bank information has changed since then? The IRS website states a web portal is being developed so individuals can update their banking information online to ensure their stimulus check is deposited appropriately. 

By law, the Treasury must send a notice of payment, by mail, to your last known address. The notice will include a phone number at the IRS to contact if you didn’t receive the payment. This could be helpful for individuals who live at the same address listed on their last tax return but have new banking information and don’t update it in the promised IRS portal. If that’s the case, they can theoretically pick up the phone and call the IRS to remedy the situation—just don’t expect this to be a quick process, since even in normal times getting through to the IRS can require multiple tries and a long time on hold. 

4. Many college students won’t qualify for a stimulus check

One major caveat of the stimulus checks are that anyone categorized as a dependent won’t qualify for payment. This will force many college students to be determined as ineligible for a stimulus check.

Who is a dependent? By law, a child under the age of 19 at the end of the year, who lives with you for more than half of the year and has not provided more than half of his or her own support for the year, qualifies as your dependent, so long as he or she doesn’t file a joint return for the year.  But a full time student under the age of 24 is also your dependent, even if they live mostly at college—-if you provide more than half their support and they aren’t married and filing a joint return.  

Some might think that they can get around this no-stimulus-for-dependents over 17 provision by asking their parents not to claim them on their taxes, if they haven’t already. No dice. As long as a student is a dependent under the legal definition in the law, they still won’t qualify for a stimulus check, even if their parents don’t actually claim them.

If the student falls out of the legal definition of a dependent, they should consider filing a tax return with the IRS even if they have no taxable income to be eligible for a stimulus check.

5. Owing the IRS money won’t affect your stimulus check

Owing the government money is never fun. Usually, the government will come after your tax refund to offset money you owe. That might have you thinking your stimulus check might be up for grabs as well if you’ve got a tax debt to Uncle Sam. 

The good news is, stimulus checks likely won’t be seized to pay a tax debt. The only time they will be withheld is when an individual owes child support money. 

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