U.S. Stimulus Checks, Economic Impact Payments Under the CARES Act; What Wisconsin Residents Can Expect
Under the CARES Act, the IRS will be making non-taxable “economic impact payments” in the coming months to millions of Americans. The payments are meant to help individuals and families during this time of economic uncertainty.
Who is eligible for the stimulus payments and for what amount of money?
Eligible taxpayers who filed returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples, and up to $500 for each child under the age of 17. Tax filers with an adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
For filers with incomes above $75,000 single and $150,000 joint, the payment is reduced by $5 increments for each $100 above the threshold. Single filers with income exceeding $99,000, and joint filers above $198,000 with no children are not eligible.
You can find your adjusted gross income on Line 8b of the 2019 1040 federal tax return.
To calculate how much you will receive for an economic impact payment, visit here.
Dependents and college students – will they get a stimulus check?
If anyone claims you as a dependent on their tax return, you will not be eligible for the economic impact payments. Usually, students under the age of 24 are dependents in the eyes of the taxing authorities if a parent pays for at least half of their expenses. If young adults filed your most recent taxes NOT as a dependent (make sure your parents did not claim you as a dependent), you will qualify for the stimulus payment based on your income.
Whose healthcare insurance you are on is not relevant to the stimulus payment for young adults.
What if you haven’t filed a 2019 tax return yet? Can you still get a stimulus check?
If you haven’t prepared a tax return yet for 2019 (deadline has been extended to July 15, 2020), the IRS will use your 2018 return.
What if you made too much money in 2019, but anticipate making less money in 2020?
The plan does not help people in that circumstance now, but you may benefit once you file your 2020 taxes. That’s because the payment is technically an advance on a tax credit that is available for the entire year. So, it will depend on how much you earn in 2020. If you do earn below the threshold in 2020, you should receive a tax credit when you file your 2020 tax return.
Is there an applications process to receive the stimulus check?
If the IRS already has your bank account information from your 2019 or 2018 returns, it will transfer the money to you via direct deposit, based on the recent income-tax figures it already has. If you have changed banks since you last filed your return, the IRS said on its website that it would build a portal where people can update their information in the coming weeks.
Important to note: Some seniors, low-income taxpayers, Social Security recipients, veterans, and individuals with disabilities who typically do not file returns, will need to file a simple tax return to receive an economic impact payment and would not owe tax on it.
When will stimulus payments be distributed?
The IRS recently announced the distribution of economic impact payments would begin around April 16, 2020.
If you have an outstanding tax filing obligation for 2018 or 2019, you are urged to file your return as soon as possible to receive an economic impact payment timely.
Let the lawyers at Murphy Desmond S.C. help
If you have questions about the economic impact payments, the attorneys at Murphy Desmond can help. Please call 608.257.7181 or email us at email@example.com. We have offices in Madison, Janesville, Appleton, and Dodgeville, Wisconsin, and are available to assist on all your personal and business legal needs.
Published April 3, 2020