Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, individuals will be receiving automatic economic impact payments to help with the impact of COVID-19. You have probably heard that the IRS will be making payments in the coming month but here is what you need to know about them.
US Residents will receive $1,200 for individual or head of household filers and $2,400 for married filing joint filers subject to the following adjusted gross income limitations based on the 2019 tax return (or the 2018 tax return if 2019 hasn’t been filed yet):
- $75,000 for individuals
- $112,500 for head of household
- $150,000 for married couples
Taxpayers will receive a reduced payment if their adjusted gross income is between:
- $75,000 and $99,000 for individuals
- $112,500 and $136,500 for head of household
- $150,000 and $198,000 for married couples
Taxpayers with an adjusted gross income above the thresholds will not receive an economic impact payment. Also, if you can be claimed as a dependent on someone else’s return you will not receive a payment.
Parents will receive an additional $500 for each dependent child under the age of 17.
In recently issued guidance, individuals receiving Social Security and taxpayers that do not make enough money to have to file a tax return will still receive a payment.
Recipients will receive the economic impact payments as a direct deposit or by paper check if no banking information is on file with the IRS. The IRS plans to mail a letter about the economic impact payments within 15 days after the payment is made. The letter will provide information on how the payment was calculated.
If you have any questions about the economic impact payments or any other COVID-19 issues, please reach out to us.