Congress has just passed a new bill called the CARES Act to provide stimulus and relief for the Coronavirus situation. One of the biggest parts of the bill is stimulus money that will come directly to individual taxpayers in the next few weeks. The precise timing is unknown but 6-8 weeks until checks are in the hands of taxpayers is our current projection.
Section 2201 of the CARES Act provides for rebates to individuals. A 2020 recovery rebate for individuals is created as a way to give cash directly to individuals in the next few weeks. Here are some details on the stimulus checks.
- Advanced refund payments based on 2018 or 2019 tax return income would be issued immediately. If you have filed a 2019 return it will be based on your 2019 income. If you have not yet filed a 2019 return it will be based on your 2018 income. If you don’t get it based on 2018/2019 income but do based on 2020 income you’ll receive it with your 2020 tax return instead.
- Credit is reduced when a taxpayers AGI exceeds $75k single $150k married, $5 reduction for every $100 over threshold
- Tax credit calculated again on 2020 return of $1,200 for each adult filing a return, $500 additional for dependent children under age 17, if an advanced credit was received that will reduce the credit on the 2020 return. If the advanced credit was more than the 2020 credit calculated taxpayers will not have to pay back the advanced amount.
- In order to qualify the taxpayer must have a SSN and must not be a dependent of another taxpayer
Contact Chris Wittich, CPA at firstname.lastname@example.org if you have questions.
CARES act stimulus credit calculator (in Excel format)