Many Texans who are suffering financially from the effects of COVID-19 and the closure of many businesses should receive relief checks from the federal government in the coming weeks.
The $1,200 checks being sent to individuals and $2,400 checks for couples are part of a $2 trillion economic stimulus package approved by Congress. As with any large government program, there are many details to satisfy all the needs being targeted. Many people are confused about what to expect.
Herrman & Herrman PLLC is putting you first by answering the following common questions about the economic stimulus checks being sent to individual taxpayers as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Will I Receive a COVID-19 Tax Rebate Check?
Most people who filed tax returns for either 2019 or 2018 will automatically receive an “economic impact payment” of up to $1,200 for individuals or $2,400 for married couples filing jointly, plus up to $500 for each dependent child age 16 or younger.
A full payment will be sent to individuals with an adjusted gross income up to $75,000 and to married couples filing jointly with income up to $150,000. For taxpayers with incomes above those amounts, the payment amount will be reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
Your 2019 or 2018 tax returns will be used to calculate the payment you receive. If your income drops this year and you would have received more money than your 2019 or 2018 return allowed, you will receive the extra payment in the 2020 tax season (i.e., 2021). Taxpayers whose 2020 income would have reduced the amount of the rebate will see any overpayment forgiven.
Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible to receive stimulus checks. You are not be required to file a return.
The Tax Foundation estimates that the average check will be about $1,523, with checks ranging from $1,436 to $45 for the highest-earning eligible taxpayers.
This is a one-time payment, but Congress may consider additional rebates if the economic downturn caused by the COVID-19 pandemic is prolonged.
Are There People Who Will Not Receive a COVID-19 Relief Check?
Individuals who file taxes as singles and whose income exceeds $99,000 and joint filers with income exceeding $198,000 with no children are not eligible for coronavirus relief checks.
How Will Texas Residents Receive Coronavirus Relief Payments?
The IRS will use information from the tax returns filed by most eligible rebate recipients to know where to send payments. Eight out of 10 taxpayers get their tax refunds by direct deposit, according to the Internal Revenue Service. The economic impact payment will be deposited directly into the same banking account reflected on the return you filed in 2018 or 2019.
If the IRS does not have direct-deposit information for you, you will need to use a web-based portal set up for individuals to provide your banking information to the IRS online. As of this writing, this portal was still under development by the Treasury Department.
If you do not have banking information on file with the IRS, you will be mailed a check.
When Will Texas Residents Receive Coronavirus Relief Payments?
The CARES Act directs the U.S. Treasury to pay tax rebates out as rapidly as possible and appropriated $396,450,000 for the Treasury and the Social Security Administration to administer the program.
In an appearance on “Face the Nation” on March 29, Treasury Secretary Steven Mnuchin said coronavirus relief checks will start being delivered via direct deposit to recipients “within three weeks.”
“If Mnuchin’s forecast proves accurate, some people would receive stimulus payments sometime around the middle of April,” Money.com said. “However, there is some skepticism that such a timeline is realistic. It took the IRS six weeks to start sending out rebate checks in 2001 as part of a tax cut, and upwards of three months for checks to be sent after a stimulus package was approved in 2008.”
CNBC reports that if you do not have banking information on file with the IRS, it could be several months before you receive a mailed rebate check. Low-income workers will get priority when it comes to sending paper checks.
The Washington Post said the highest-income individuals eligible for rebates and those who had to submit information to the IRS because the agency didn’t previously have their information could also wait months to receive checks.
How Do Other Federal Benefits Impact My COVID-19 Payment?
Federal benefits should have no impact on your coronavirus rebate. For example, most people who are receiving Social Security retirement and disability payments each month will also get a stimulus payment, a New York Times FAQs about the coronavirus stimulus package says. People who are unemployed and veterans are eligible for payments, as well.
How Can I Keep Up with News About COVID-19 Tax Relief Payments?
The IRS communicates with Americans through multiple social media channels in English and Spanish, and through the IRS2Go mobile app. The IRS’s YouTube channels present short, informative videos in English, Spanish and American Sign Language.
To connect with the IRS through social media, go to IRS.gov/socialmedia.
The IRS has 20 registration-based e-News options available at its e-News Subscription service. The IRS Newswire provides news releases the day they are issued. These cover a wide range of tax administration issues ranging from breaking news to details related to legal guidance. They are also available in Spanish.
The IRS urges taxpayers to be alert for IRS impersonators and other scammers. “The IRS isn’t going to call you asking you to verify or provide your financial information so you can get an economic impact payment or your refund faster,” IRS Commissioner Chuck Rettig said in an April 2 news release that provides tips for recognizing a scam. “That also applies to surprise emails that appear to be coming from the IRS. Remember, don’t open them or click on attachments or links. Go to IRS.gov for the most up-to-date information.”
If you have general questions about the COVID-19 coronavirus, such as symptoms, prevention steps and more, visit the Centers for Disease Control and Prevention (CDC) COVID-19 page.