Home > Stimulus Update

Stimulus Update

April 3rd, 2020 at 05:36 am

I am absolutely exhausted (work week from hell). So if this is gibberish, I will fix it later.

The U.S. tax stimulus will be $1,200 per adult and $500 per dependent child (under age 17). There is also an income cutoff for receiving these payments. (Just google it, it's all over the news).

Edited to add: The definition of "adult" is mostly someone who is not a dependent. So your college kids are not going to receive the $1,200 and you will not receive $500 for them.

As pointed out to me in my last blog post, you get to keep this stimulus. It sorts out when you file your 2020 tax return if you are owed a bigger stimulus amount (if your income changed, you had a new baby, etc.). But if you were overpaid based on income/dependent changes, you won't have to pay anything back.

Tax Planning Point: They will base these stimulus payments based on your 2019 tax return if it was filed. Based on 2018 if you did not file your 2019 tax return yet. If you had a big jump in income in 2019 and haven't filed yet, you might want to take your time. Not sure how much that helps if it takes 20 weeks to mail out checks. But, I have seen this advice thrown around. I suppose it could be wise to file an extension and not file your tax return until you get your stimulus if that's the case.

The wish of the legislature was to get these checks out in 2 weeks. šŸ™„ This sounds pretty pie-in-the-sky to me. But I know firsthand the IRS is severely understaffed, and also that many of their workers were sent home. But anyway, I just saw a headline on CNN that the IRS said they need 20 weeks to get checks out. Yes, 20 weeks!

IRS put up a site with some FAQs that I will put at the end of this post. Last I looked (a few days ago) it was mostly, "Check back later for details". In that FAQ they said that if for any reason you didn't file a tax return in '18 or '19, for example if you only had social security income and had no requirement to file, they will set up a simple online process to file a "basic" tax return just to provide the information to get your stimulus check.

Oh yeah, and if you had a direct deposit refund in 2018 or 2019, they will use that information to direct the deposit into your bank account. Direct deposit stimulus payments are expected to be done around April 15th. So if you had a tax refund and chose direct deposit, you might get your stimulus payment in about two weeks. (It's the remaining checks that will take several weeks to process. It will take them 5 weeks to be able to print out the first stimulus checks). On the IRS FAQ they also mentioned setting up some kind of an online form for taxpayers to provide their direct deposit information for a quicker stimulus payment. Details to follow later...

I ended up taking a tax/COVID class yesterday. The tax professionals were pushing back hard. The IRS expecting every fixed-income retired adult to figure out how to request their stimulus?... Tax professionals were insisting there must be a way to cross reference social security records, at the least.

In the end, the IRS has already caved. The IRS will also issue stimulus payments based on social security records. There will still be people who don't file tax returns for various reasons and will have the chance to request their stimulus with some sort of online process, but at least this captures a chunk of the lower income/older population who isn't going to have a lot of help with this stuff in isolation. (& now that I am reading the updated website, they don't have any mention of how you request stimulus in other situations, so it seems to be just changing every day at this point. Who knows).

Economic impact payments: What you need to know

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Social Security Recipient Update:
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Some Americans could wait 20 weeks to receive stimulus checks, IRS tells House Democrats
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One final tax thing: IRS has extended tax deadlines from April 15th to July 15th. You will have to check to see if your state has followed suit. There was a lot of back and forth, "What about this and that and this?" Estimate payments, IRA contributions, etc. At this point, it's all extended to July 15th.

Edited to Add: As of April 9th, I see they extended pretty much EVERYTHING, including (June 15th) second quarter estimate deadline. Also finally caved on 3/15 business tax deadlines.

12 Responses to “Stimulus Update”

  1. mumof2 Says:

    funny I have been trying to get my itin number for months and they are like the irs office is super busy...well that hasn't stopped and now they are needing to deal with this issue...don't think I will ever be ablr yo get it and do our taxes...its frustrating

  2. Kymberlee Fisher Says:

    1st Quarter 2020 Estimated Tax Payment Due
    If you are self-employed or have other first-quarter income that requires you to pay quarterly estimated taxes, get your Form 1040-ES postmarked by July 15, 2020 tax deadline.

  3. Turtle Lover Says:

    I EXTRA appreciate you keeping us (me) updated on this. Thank you!

  4. LivingAlmostLarge Says:

    I thought and heard that they can claw back your stimulus if you got it based on 2018 and in 2019 didn't qualify income wise on the 2020 return. That they will be truing people up at that time.

  5. MonkeyMama Says:

    @LAL - That may have been discussed at some point, but the final law does not include any clawbacks:
    "If the advanced rebate received was greater than the credit to which the taxpayer is entitled, the taxpayer is not required to pay back the excess."

  6. Julie Says:

    Thanks for the info! I keep reading that the IRS will use "direct deposit refund" information to deposit the stimulus, but what if you didn't get a refund? What if you owed money to the IRS for 2019 and gave them your bank account information to make the payment. Will the IRS use this bank account info to deposit the stimulus?

  7. MonkeyMama Says:

    Julie, good question. I've seen mixed things about this. I saw from a reputable source they will use your electronic payment information. (Which is a little too 'big brother' and creepy for me; this is not information that is on your tax return). I will be able to confirm this soon because I did not have tax refunds the last few years. IF the stimulus shows up in my bank account anyway, I will let you know.

  8. MonkeyMama Says:

    UPDATE: Just saw an article today that they are doling out the checks (that take 20 weeks) in order of income level. The first checks to roll our will be for households with under $10k income (per person). If your household income is $99k per person (the cutoff), paper checks are scheduled to go out in September.

  9. Amber Says:

    March has been the work month from hell so I understand. Iā€™m in HR, and things are constantly changing. Thanks for sharing

  10. LivingAlmostLarge Says:

    So if you filed but qualified in 2018 and not 2019 it would have been better to not have file. But if you end up qualifying in 2020 you still might get stimulus next year?

  11. MonkeyMama Says:

    @LAL - if you qualify in 2020 (but not earlier years) you will get the stimulus when you file your 2020 tax return.

  12. MonkeyMama Says:

    @Julie ~ "The account information used to make an electronic payment to the IRS cannot be used as the account information for the direct deposit of your payment. If we do not have bank account information for you and your payment has not been processed yet, Get My Payment will allow you to submit your bank account information once you have properly verified your identity so that you can get your EIP via direct deposit. Otherwise, we will mail your payment to address we have on file for you."

    You can see my latest blog post for the "Get My Payment" website.

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