US lawmakers passed the $2-trillion stimulus bill called the CARES (Coronavirus Aid, Relief, and Economic Security) Act to mitigate the economic impact of the coronavirus pandemic. It was signed into law by the President on March 27, 2020.
The following are frequently asked questions regarding the new law.
Am I qualified for a stimulus payment?
You automatically qualify if your income falls within certain levels and you have a Social Security number.
How much is the stimulus payment?
Payments are $1,200 for individual taxpayers, $2,400 for those Married Filing Jointly, and $500 per child under age 17.
Those with incomes over $75,000, Head of Household with income over $112,500, or Married Filing Jointly with income more than $150,000 will receive reduced payments.
The stimulus has a “phase out” limit based on one’s Adjusted Gross Income (AGI) that eliminates those with incomes that goes above certain levels.
When will my stimulus payment arrive?
Payments started going on April 6, 2020.
Do I need to do anything first to get the payment?
If you filed a tax return for tax year 2018 or 2019, the IRS will issue the payment.
Do I need to file my 2019 tax return to get a stimulus payment?
As long as you filed a 2018 tax return, no.
Does filing a 2019 tax return increase my stimulus payment?
Yes, if you were above the “phase” out limit in 2018 and then had less income in 2019. Filing your 2019 tax return may increase the amount.
How will I get my stimulus payment?
The IRS has stated that it will directly deposit the amount into the bank accounts of those who have their account information on file with the agency. Those who don’t have an account on file, the IRS will mail the check to the last address on file the tax return.
What if I moved?
File Form 8822 or file your 2019 tax return with your new address.
Will I get a payment if I am claimed as a dependent?
No.
Do you need to pay taxes next year on the stimulus payment?
No.
If I owe money to the IRS, will I still get the stimulus payment?
The IRS has announced that the offset program will not be used for the stimulus. Even if you owe the IRS, you will still receive the payment.
Does the stimulus plan increase unemployment benefits?
Yes.
What amount of benefit will I get if I lose my job?
This will depend on your state. For example, the maximum benefit for California is $450 per week. The new stimulus plan adds an extra $600 per week to that amount, for up to 12 weeks, which will give it a new maximum benefit is $1,050 per week.
Where can I apply for unemployment?
With your state agency. In California, that would be the Employment Development Department.
Are self-employed eligible for unemployment benefits?
Yes. You will have to submit proof of self-employment income to receive unemployment.
Can part-time workers get unemployment?
Yes.
If I was on unemployment before but then ran out of benefits, can I re-apply for more benefits?
Yes.
Are unemployment payments received in 2020 taxable income on my 2020 tax return?
Yes.
Do I need to pay my student loans right now?
For federally-backed student loans, you don’t have to pay again until September 2020.
Do I need to pay mortgage right now?
Check with your lender because many lenders have already instituted a hiatus.
Do I need to pay rent right now?
The stimulus law puts a 120 day hold on evictions if the landlord has a mortgage backed by the federal government.
Can I access my retirement account without penalty?
The IRS has loosened early withdrawal penalties if the withdrawal is related to the coronavirus pandemic.
We Can Help
If you need professional help with your stimulus payment, our experienced tax professionals can help guide you in the right direction. Contact us today at 818-452-2641 or fill out our contact form to schedule a free consultation.
