2020 Government Stimulus-What You Need to Know

We would like to pass along the following information from our friends at Prosperity Now in regards to the 2020 stimulus package that was passed by the United States Congress in March 2020.

Background

The bipartisan stimulus package will send $1,200 to taxpayers making less than $75,000 ($2,400 for married taxpayers making less than $150,000) and an additional $500 per child under age seventeen. For Head of Household filers, the income limit surges to $112,500. After the initial income threshold, the $1,200 benefit will diminish at a rate of $5 per $100. This calculator can help shed some light on the potential stimulus benefits for taxpayers. The income level will be based filed 2019 or 2018 tax returns, or eligible Social Security payments. In order to receive the payments, the taxpayer must also have a Social Security Number. This means undocumented workers are ineligible to claim the stimulus check. For filers who have used direct deposit for either of the aforementioned tax years, their stimulus check will arrive via direct deposit sometime in April. Taxpayers will have to wait longer in order to receive their disbursements in the form of a live check.

Quick Facts

  1. Is this rebate counted as income for 2020? No, the rebate is treated as a fully refundable credit such as the Earned Income Tax Credit and cannot be considered as income.
  2. Is there a qualified income requirement? No, there is no income requirement. So long as the other qualifications are met, taxpayers with $0 in income will still receive their rebate check.
  3. What if I don’t get the stimulus payment or did not get the full benefit of the credit? Due to the unique structure of this rebate as an advance on a tax credit that can be claimed on the 2020 tax return, you’ll be able to claim any differences on the credit on the 2020 return.
  4. Are college students eligible? If the student made under the threshold amount; has a Social Security Number; and cannot be claimed as a dependent under someone else’s tax return, then they are eligible for the rebate.
  5. Will this rebate be counted against any outstanding back taxes? No, this rebate supersedes nearly all past debts so if you owe back taxes, you’ll still receive your full rebate amount.
  6. When will I get my check? According to Treasury Secretary Steve Mnuchin, the first stimulus payments will be distributed within three weeks. Depending on the complexity of the disbursements, the payments may take longer than the three-week timeline.

For Information on the 2020 Economic Impact Payments Click Here