Tax Questions Answered about COVID-19 Stimulus Checks

A lot of people have questions about the stimulus checks, but there is a lot of incorrect information floating around out there.

We at Fix-It Accounting are committed to provide our clients with the correct information and help them understand what is available to them. Here’s the scoop as of the date of this post. It is subject to change:

When will the stimulus checks be sent?

  • The Treasury Department announced that the distribution of payments will begin in the next 3 weeks and will be distributed automatically, with no action required for most people. Our sources say that some of the direct deposits have already begun to go out. Check your bank account!

Who is eligible to receive the stimulus checks?

  • Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment of $1,200.

  • For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.

  • Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

  • Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. 

  • Eligible taxpayers 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 and up to $500 for each qualifying child.

How will the IRS know where to send my stimulus check?

  • The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

  • For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment.

  • The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?

  • In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?

  • Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

  • Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.

I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?

  • Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I owe the IRS for back taxes. Will I get a check?

  • Yes. Your unpaid tax obligations will not reduce your stimulus payment.

The Fix-It Accounting team is here to assist you with getting your unfiled return submitted and/or adding your banking information to the IRS online portal. Respond to this email or give our office a call at 386-320-5347.

Nancy Benet