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COVID-19 Economic Stimulus Payments – Eligibility & How to Get Yours

On March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the latest in a series of federal emergency stimulus measures to mitigate the economic fallout of the COVID-19 pandemic.

The $2.2 trillion package featured expanded unemployment insurance benefits for American workers, targeted support for industries hit hard by the pandemic, and billions in fiscal aid for small and midsize businesses.

It also provided for the first round of cash stimulus payments to individuals in more than a decade. The last came in 2008 as the United States economy languished amid a worsening global financial crisis.

According to the Internal Revenue Service, most Americans received one-time cash payments from the Treasury Department beginning in April 2020. These payments topped out at $1,200 for adult individuals and $2,400 for married couples who jointly file tax returns, depending on income. Minor dependents receive $500 per qualifying child.

In December 2020, Congress passed a new stimulus package this month that includes another round of cash stimulus payments to individuals and families. These checks top out at $600 per qualifying individual (and $1,200 per qualifying couple), including minor dependents not awarded the full payment amount in the first round. The income phaseout uses the same formula as the first round (a $5 step-down for each additional $100 in eligible income) but the lower maximum check amount means the final phaseout threshold is lower. These payments are set to hit bank accounts during the first two weeks of January.

In any case, before you start thinking up ideas for what to do with your economic stimulus check, it pays to know the details. Bookmark this article for more information on your stimulus eligibility and likely payment amount, the latest updates on when to expect your payment, and news about any future rounds of economic stimulus.

Are You Eligible for a COVID-19 Economic Stimulus Payment?

About 90% of Americans were eligible to receive economic stimulus payments — which the IRS calls “economic impact payments” — under the CARES Act. A slightly lower number are eligible to receive the second round of payments passed in December 2020.

However, some recipients didn’t receive the full $1,200 allotment per adult from the first round or the full $600 allotment per qualifying individual from the second round. Some won’t receive any payment at all due to income restrictions.

Also of note: Eligible recipients who typically don’t file tax returns (or didn’t file in 2018 or 2019) may need to file at least a simple return to ensure receipt. (The IRS has up-to-date guidance on this point.) Note that regardless of your income or the amount you receive, you won’t owe tax on any portion of your stimulus payment.

Income Limits & Phaseouts for the First COVID-19 Economic Impact Payments

During the first round of stimulus payments, the maximum adjusted gross income (AGI) to receive the full $1,200 allotment per adult American was:

  • $75,000 for single filers, including married individuals who file separate returns
  • $112,500 for head-of-household filers, a common filing status for single parents
  • $150,000 per couple for joint filers

Above these thresholds, the payment amount phased out (gradually decreases) by $5 for every $100 in additional AGI until phasing out entirely at $99,000 for single filers and $198,000 for joint filers with no dependents.

If you filed a tax return in 2018 or 2019, the IRS used your most recent AGI to calculate your payment.

Economic Impact Payments for Children in the First Round of COVID-19 Stimulus

Filers who claimed dependent children on their tax returns received $500 per child, subject to maximum income limitations.

Benefits for dependent children didn’t begin phasing out until their parents or guardians hit the maximum income threshold for their own stimulus payments. At that point, child payments stepped down by $5 for every $100 in additional AGI until phasing out entirely. The step-down rate did not depend on the number of child dependents claimed, so the final phaseout threshold rose in proportion to the total dependent count. For example, the phaseout thresholds for single or married filing separately filers with minor dependents were:

  • One Child: $109,000
  • Two Children: $119,000
  • Three Children: $129,000

The phaseout continues to rise by $10,000 for each additional child.

If you filed a tax return in 2018 or 2019, the IRS will use your most recent return to calculate your qualifying dependent payments.

A Note About Stimulus Check Discrepancies

When electronic payments first began hitting bank accounts in April 2020, some stimulus check recipients reported lower-than-expected direct deposit payments. In many cases, recipients received payments for themselves and/or their spouses but not for some or all of their dependent children.

At the time, the IRS wasn’t accepting calls due to the COVID-19 pandemic and hadn’t issued formal guidance around payments for adults and dependent children. However, the agency did send out official explanation letters in the subsequent weeks that addressed reported discrepancies — hopefully, to most recipients’ satisfaction.

You can always visit the IRS’s coronavirus information page for the latest official guidance on stimulus check payments. You can also use this handy calculator from H&R Block to confirm your eligibility and calculate your estimated second stimulus payment.

Tax Return Filing Requirements for People Who Normally Don’t File Returns

Initial communications from the IRS indicated that people who don’t normally file tax returns, such as senior citizens and Social Security disability recipients, would have to file simple tax returns by the end of calendar year 2020 to claim their economic impact payments. Following a public outcry, the IRS walked back this requirement.

According to its latest update on the matter, the IRS will use information from Form SSA-1099 or Form RRB-1099 to process impact payments for people who aren’t normally required to file tax returns. Because these forms don’t include dependent information, people not normally required to file tax returns won’t receive payments for eligible dependents unless they take the extra step of filing a simple tax return.

If you choose to file a simple tax return, it must include basic information about you and your tax situation, including:

  • Your filing status
  • Your address or direct deposit bank account information
  • The number of dependents you can claim on your return (if any)
  • Your Social Security number or other valid taxpayer identification number (TIN)

Because economic impact payments aren’t taxable, you won’t be required to file an additional return to report your economic impact payment.

If you need to file a simple tax return, there’s a good chance you can file your simple tax return with no out-of-pocket expense. Use a free tax filing resource that allows filers who meet certain income and demographic criteria to file for free.


How & When to Expect Your Stimulus Payment

To reduce costs and expedite delivery, the IRS prefers to send COVID-19 economic impact payments electronically rather than by check. However, the IRS needs up-to-date bank account information to execute electronic payments. If the IRS doesn’t have your current bank account on file and you’d prefer to receive your payment electronically, you need to take action.

How to Receive Your Stimulus Payment Electronically

If you’ve already filed your 2018 or 2019 taxes and provided your direct deposit information to the IRS (and that information is still correct), you don’t need to take further action unless you’ve closed your direct deposit account in the meantime. Expect your payment to arrive in that account sometime after April 20.

If you would prefer to receive your stimulus payment electronically, but the IRS doesn’t have a current bank account on file for you and you didn’t file a 2019 return, visit the IRS’s coronavirus information page and use the “Get My Payments” tool to provide your bank account information. You’ll need to confirm key details from your most recent tax return, including your AGI and amount owed or refunded, but the process should take less than 5 minutes if you have your most recent tax return handy.

Note that if the IRS has your direct deposit information for 2018 but not 2019, you may need to use the “Get My Payments” tool to provide your bank account number, even if your account hasn’t changed. Likewise, if you apply your federal tax refund to your quarterly estimated tax payments rather than receive it by direct deposit (which is common for business owners and self-employed individuals), the IRS may still need your bank account information to process your stimulus payment.

How to Receive Your Stimulus Payment by Paper Check or Prepaid Card

If you don’t mind receiving your stimulus payment by paper check or prepaid card and the IRS has your current address on file, you don’t need to take any action.

If the IRS does not have your current address on file because you moved since filing your most recent return, complete and mail Form 8822. Be sure to send this form to the appropriate IRS mailing address, which is printed on Page 2 of the form.

If you plan to file a 2019 return before the IRS begins distributing economic impact payments, you can update your address on the return.

If you haven’t filed a return recently and you’ve changed addresses since you last filed a return, you must file a simple federal tax return to ensure the IRS has accurate address information on file.

When to Expect Your Stimulus Payment

According to the IRS, about 80 million Americans received their stimulus checks via direct deposit on or about April 15, 2020.

If you’re OK with (or prefer) receiving your payment by check or prepaid card, know that the IRS has said it could take up to 20 weeks – into September 2020 – to disburse these nonelectronic payments.

If you’re expecting your stimulus payment by direct deposit and haven’t received it by April 15, 2020, use the “Get My Payment” tool in the IRS Economic Impact Payments portal to learn when you can expect to receive it (and confirm that you’re eligible to receive it at all).

Within a few weeks of your payment’s issuance, the IRS will mail you a written notification stating how and when it was disbursed. If you receive this notification and can’t locate your payment, contact the IRS for more information.

Using the IRS’s “Get My Payment” Tool and Replacing a Prepaid Card

If you believe you your first or second stimulus payment is missing, use the “Get My Payment” tool to check the status of your payment and provide additional information if needed using IRS guidelines.

Likewise, if you suspect you accidentally misplaced or disposed of the prepaid card containing your stimulus payment, you can report the issue to the card issuer and receive a new one at no cost to you. Bear in mind that your original card will be deactivated as soon as you report it missing. You’ll need to wait for the new one to arrive to use your funds, even if you find the original in the meantime.


Final Word

The COVID-19 pandemic has already hit the economy hard. With the outbreak showing no signs of slowing, further fiscal pain — not to mention human suffering and loss of life — is inevitable.

Though some employers are hiring during the COVID-19 pandemic, most are battening down the hatches and counting on government assistance to help ride out the storm. To the extent you’re able, consider using a portion of your economic stimulus payment to support small businesses during the pandemic. They need our help now more than ever.

In the meantime, do your part to protect your stimulus windfall by learning how to suss out potential coronavirus scams. Better to prepare now than to find yourself in a tight spot later.

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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