Amidst the worst viral pandemic in over a century, the federal government enacted the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) which allocates billions of dollars to assist corporations, small businesses, and individual families. The feds are ramping up the process in which individuals can receive up to $1200, couples can receive up to $2400, and parents can receive up to $500 per dependent child. The payments are quasi-needs based, in that, after certain income thresholds, the payable benefit starts to reduce in size. Individuals with adjusted gross incomes less than $75,000 per year and couples earning less than $150,000 per year should receive the full benefit amount.
The Treasury Department is currently drafting the regulatory framework to process the payments under the CARES Act. Direct deposits will likely be the quickest way to access the benefit. If you provided the IRS with direct deposit information in your 2018- or 2019-income tax filings, industry insiders expect the IRS will deposit payments to the account information they have on file beginning in mid to late April.
The Washington Post has launched a ‘stimulus check calculator’ that you can access to get an estimate of your benefit under the CARES Act. The calculator can be accessed by visiting The Washington Post.
Steps you can take now!
- If you provided direct deposit information on 2018 or 2019 tax returns, the government has stated they will use that direct deposit info to transfer your economic impact payment to you.
- If you haven’t filed your taxes for 2019 (the filing deadline has been extended to July 15, 2020) you can file your returns and include direct deposit information with your return. This will allow the IRS to use that direct deposit info to process your benefit.
- If you have not provided direct deposit info on your 2018 or 2019 tax return, and you do not intend to file your 2019 return anytime soon, the IRS is in the process of setting up an online portal that will allow users to give the IRS direct deposit information. Setting up this online portal will likely take several weeks, perhaps even months.
- If you are not going to use direct deposit, the protocol for processing paper checks to be sent to the public is being prepared, but industry insiders point to past stimulus payments for historical precedent and believe paper checks could be months away from being processed.
- Regularly visit the website for the IRS where you can see updates to the economic impact payments under the CARES Act. Visit irs.gov/coronavirus for more information.