CARES Act 2020 Frequently Asked Questions
Read the SSA press release here
Q: Who is eligible for a recovery rebate?
A: All U.S. residents or citizens with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 married), who cannot be claimed as the dependent of another taxpayer and have a work-eligible Social Security Number, are eligible for the full $1,200 ($2,400 married) rebate. They are also eligible for an additional $500 per qualifying child. A typical family of four is eligible for a $3,400 recovery rebate.
Q: What about taxpayers with adjusted gross income over $75,000 ($112,500 for head of household and $150,000 married)? Are they eligible to receive any rebate?
A: The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children. For a typical family of four, the amount is completely phased out for those with adjusted gross incomes exceeding $218,000.
Q: What if my income was above the threshold in 2019, but I’ve lost my job due to the corona virus? Can I still get a rebate check?
A: If your income in 2019 was in the phase-out range you would still receive a partial rebate based on your 2019 tax return. However, the rebate is actually an advance on a tax credit that you may claim on your 2020 tax return. If your income is lower in 2020 than in 2019, any additional credit you are eligible for will be refunded or reduce your tax liability when you file your 2020 tax return next year.
Q: Is the rebate taxable or will I have to pay back any amount if the rebate based on my 2019 return is larger than what it would be if based on my 2020 tax year return?
A: No, the rebate is treated like other refundable tax credits, such as the child tax credit and earned income tax credit, and not considered income. Moreover, if the credit amount you qualify for based on 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back.
Q: Who qualifies as a child for purposes of the rebate?
A: Any child who is a qualifying child for the purposes of the Child Tax Credit is also a qualifying child for the purposes of the recovery rebate. In general, a child is any dependent of a taxpayer under the age of 17, who has a work-eligible Social Security Number.
Q: Do dependents, other than children under 17, qualify a taxpayer for an additional $500 per dependent?
A: No, the additional $500 per child is limited to children under 17.
Q: Are individuals with little to no income ($12,200 or less for individuals, $24,400 or less for married couples filing jointly) or those on means-tested federal benefits eligible for a recovery rebate?
A: Yes, there is no qualifying income requirement. Even individuals with $0 of income are eligible for a rebate so long as they are not the dependent of another taxpayer and have a work-eligible SSN. You can provide your information at https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
Q: Are seniors whose only income is from Social Security or individuals whose only income is from Supplemental Security Income (SSI) or Veteran’s benefits eligible for payment?
A: Yes, as long as they are not the dependent of another taxpayer. They will receive their stimulus check payments automatically. There is no further action they need to take. However, if they want to claim the $500 payment for any child for whom they are guardians, they can log onto https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here and create an account, providing their dependent’s information. For Social Security recipients only, the dependent information must be inputted by 9:00 a.m. PST on Wednesday, April 22, 2020 to receive the additional $500. Otherwise, these taxpayers would not receive the additional $500 until they file their 2020 tax returns.
Q: Are college students eligible for a recovery rebate?
A: Only if they are not considered a dependent of their parents. Generally, a full-time college student under the age of 24 is considered a dependent if their parent(s) provide more than half of their support.
Q: I am eligible for a rebate, what do I have to do to receive it?
A: For the vast majority of Americans, no action on their part will be required to receive a rebate check since the IRS will use a taxpayer’s 2019 tax return if filed or their 2018 return if they haven’t filed their 2019 return. This includes many individuals with very low income who file a tax return despite not owing any tax in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit.
Q: What should I do if I did not file a tax return for 2019 or 2018?
A: If you have a filing obligation, file a 2018 or 2019 tax return free online at https://www.irs.gov/filing/free-file-do-your-federal-taxes-forfree. Here are two free resources for tax assistance that you can use: https://www.getyourrefund.org/?s=uwba or https://www.eventbrite.com/e/diy-taxes-marathon-event-registration-90173777195
If you do not have a filing obligation (you made $12,200 or less as an individual, $24,400 or less as a couple, or received veteran’s benefits), log onto https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here to create an account and provide information in lieu of filing an income tax return.
Q: If I have a past due debt to a federal or state agency, or owe back taxes, will my rebate be reduced?
A: No, the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.
Q: Will stimulus payments be counted against Food Stamps, Medicaid, or HUD Assistance?
A: No, these payments will not be counted as “income” or “assets” during the next 12 months for any of the federal means-tested programs, such as SNAP, Medicaid, TANF, or Section 8.
Q: I share custody of my child with another parent or other family member. Who will get the $500 rebate for my child?
A: Generally, the parent who claimed the child as a dependent in the most recent tax return likely will get the $500 child stimulus check.
Q: I am currently going through a divorce, what should I do?
A: If you are currently going through a divorce, changing your filing status may impact other credits (like the Earned Income Tax Credit) that you may be entitled to. You should consider consulting a tax professional about deciding what your filing status should be.
Q: My spouse has an Individual Taxpayer Identification Number (ITIN). Will we receive the payment if we file Married Filing Jointly?
A: You will not receive the payment on Married Filing Jointly return if one spouse has an ITIN, unless one spouse is in the Armed Forces. You may want to meet with a tax professional to determine whether you should file separately.
Q: What should I do if I haven’t filed taxes for 2019, and I had a child last year?
A: If you had a child last year, you will be eligible for the $500 additional stimulus payment. The best thing to do would be to file your 2019 tax return as soon as possible so that the IRS is aware of your new child.
Q: When will I get my payment?
A: People who filed tax returns for 2018 or 2019 with electronic deposit information: Payments are being distributed this week automatically. There is no further action you need to take.
People who receive Railroad Retirement or Social Security Benefits: The IRS will send an electronic payment to the same account or benefit card that you receive your regular monthly payment. There is no further action you need to take.
People who filed an income tax return in 2018 or 2019 without electronic deposit information: You have two options:
- Go to https://www.irs.gov/coronavirus/get-my-payment to provide your bank account information for direct deposit.
- Wait for a paper check. The following is a rough timeline: Week of May 4, 2020, the IRS will begin issuing paper checks to individuals. The paper checks will be issued at a rate of about 5 million per week, which could take up to 20 weeks to get all the checks out. The checks will be issued in reverse “adjusted gross income” order, starting with people with the lowest income first.
How to avoid scams:
SS recipients if you missed the 4/22/20 deadline to register their dependent child: https://www.ssa.gov/coronavirus/ The web page says in pertinent part: “Social Security beneficiaries need to act by Wednesday, April 22, to receive additional payments for their eligible children quickly…If beneficiaries in this group do not provide their information to the IRS soon, their payment at this time will be $1,200. People would then be required to file a tax year 2020 tax return to obtain the additional $500 per eligible child.”
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