Learn About Direct Cash Payments Under the CARES Act
On March 27th of 2020, the United States Senate passed the Coronavirus Aid, Relief, and Economic Security Act also known as the CARES Act. Recently, a lot of people have been reaching out for guidance and asking questions about how the CARES Act is supposed to support consumers and small businesses. But perhaps the most prevalent questions have been about lawmaker’s decision to provide Americans with Direct Cash Payments. Here’s what you need to know:
This one-time direct cash payment is oftentimes referred to as a stimulus check but is being technically labeled by the Internal Revenue Services (IRS) as an Economic Impact Payment. Its purpose is to act as an advanced tax credit to offset your 2020 federal income taxes.
Do You Get a Check?
You will receive an Economic Impact Payment if you:
Have a social security number.
Filed taxes in 2018 or 2019 or you do not earn enough to file but receive Social Security checks.
Earned less than $99K as a single filer, $136K as a head of household, of $198 as married filers.
Were not claimed as a dependent in 2018 or 2019.
How Much Will You Get?
Most individuals earning less than $75,000 can expect a one-time payment of $1,200. Married couples would each receive a check and families will receive $500 per child. Meanwhile, individuals earning more than $75K and couples filing jointly earning more than $150K will not be entitled to the full benefits of the Economic Impact Payment. If you’d like to get a better idea about what you can expect from your stimulus check you can use this handy online calculator we found by clicking here.
When & How Will You Receive Your Cash Payment?
Unfortunately, Treasury Secretary Steven Mnuchin has yet to announce a set date for Americans to receive their stimulus checks. NBC News is reporting that taxpayers who use direct deposit may receive their direct cash payment by mid-April. Americans without direct deposit can expect even greater delays.
You do not have to sign up to receive the cash payment. Furthermore, the CARES Act dictates that the federal government will deposit payments directly into the bank accounts of Americans as soon as possible. The IRS will use the information from your most recent tax filing to identify your direct deposit or mailing address.
While most Americans will receive their direct cash payment via direct deposit, many Americans who do not have a direct deposit set up will be mailed a paper check. It’s incredibly important that we mention that if you have recently moved and failed to inform the IRS with your latest direct deposit information, you’ll need to contact the IRS and make sure they have your correct address on file.
Lastly, any Americans who do not file taxes or get Social Security payments will get their direct cash payment the same way they receive their Social Security payments.
More Notable Information
The Economic Impact Payment is not taxable.
The Economic Impact Payment does not disqualify Americans from unemployment benefits.
Americans who owe back taxes are still eligible for the Economic Impact Payment if they qualify.
BE ON ALERT. If you receive any phone calls, E-mails, or Facebook messages requesting your personal information in regards to the Economic Impact Payments, they may be scams. The IRS has your information already and they typically choose to contact individuals through snail mail.
Help Spread the Word!
Adapt & Overcome has quickly become our motto at VB. We built this resource because a lot of friends and family of the firm reached out to us with questions about the CARES Act and the direct cash payments to Americans. In fact, we also built a similar resource for consumers and small business owners that you can find my previous two links. It's important we all do our part to reduce the impact the virus will ultimately have on our health and our economy. If you have found any of this information helpful we encourage you to share it with your friends and family.