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Information About the Stimulus Package of 2020!
The Trump Administration and Congress have just passed a law that will infuse the economy with cash to help offset the devastating economic effects of the Corona Virus Pandemic. There are a lot of unanswered questions about these payments. Here are a few answers to some of the questions we believe most taxpayers will have. :
How much will we all get?
The basic amount will be $1,200 per adult plus $500 for every dependent child under age 17 at the end of 2019.
Stimulus Benefits will be available to taxpayers whose Adjusted Gross Income is less than
Single & Qualifying Widow(er) $ 75,000
Head of Household $ 112,500
Married Filing Jointly $150,000
If your income exceeds these amounts the stimulus benefits will be reduced and eventually phased out and no stimulus benefits will be available for taxpayers whose Adjusted Gross Income exceeds
Single or Qualifying Widow(er) $100,000
Head of Household $136,500
Married Filing Jointly $198,000
When will we get the Money?
The IRS plans to begin sending money the week of April 6th. It would be reasonable to assume that not all checks will go out on that date. The last time the governmnet tried something like this the checks were sent in batches over a period of eight weeks. I'm sure the IRS will want to get the money out quicker than that, but exactly how long it might take is anyone's guess at this point.
How will we get the money?
The IRS has said they will be distributing the money via Direct Deposit as long as they have your direct deposit information on file.
Will the Money I Get Now Be Taxed Later?
The check you receive is really just an advanced payment of a tax credit for the 2020 tax year. As such, it won't be included in your taxable income.
Will the IRS Take My Check If I Owe Back Taxes?
Stimulus money is generally not subject to reduction or offset to pay back taxes or other debts owed to the federal government.
What If My Check Doesn't Arrive?
Within 15 days of mailing your check (or directly depositing it into your bank account), you will receive a notice in the mail indicating the method of payment, the amount of payment, and an IRS phone number to call if you didn't receive your payment.Both the payment (paper check) and notice will be mailed to your last known address the IRS has on file. If you have recently moved, you should file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure correspondence and payments from the IRS will be sent to your new address.
What happens to people who earned too much in 2018 and 2019 but now lost their job?
This is a really tough situation. Unfortunately, these workers are not eligible for $1,200 checks right away. They would get the rebate when they file their 2020 taxes next year. Treasury may create a program to get these people money sooner, but nothing has been announced yet.
If I owe back taxes, will my check be reduced?
No. At this point, the only reason a check would be reduced is if past child support payments are due and the amount has been reported to the federal government. This doesn't mean there may not be changes to this, but the primary purpose of this legislation is to get money into people's pockets NOW to support the economy and to help people stay afloat financially.
I have a lot more questions. What should I do?
First and Foremost, Be Patient! The ink on this legislation isn't even dry yet, and the Treasury and IRS are still figuring out a lot of the administrative details. The IRS has developed a website www.irs.gov/coronavirus where more information will eventually be posted. For now, there is no information available beyond what is in the legislation. You can always check back here, as we will attempt to post updates as we receive them!
Here are some other provisions included in the Stimulus Package!
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