UPDATED: The IRS announced that Social Security beneficiaries who are not typically required to file a tax return will not need to file a return to receive the economic impact payments. These payments will automatically be deposited into their bank accounts. This only applies to individuals receiving social security. Other individuals who typically do not file a tax return will still need to submit a return in order to receive the economic impact payment.
In a recent announcement, the IRS stated that the economic impact payments will begin being sent within the next three weeks. These payments will be distributed automatically and no action is needed by most taxpayers.
How much is the economic impact payment?
The full economic impact payment is $1,200 for individuals, $2,400 for married filing joint couples, and $500 for each qualifying child.
Taxpayers who are above the income limits will see a lower economic impact payment. The economic impact payments are reduced by $5 for every $100 above the income limit thresholds. Individuals with an adjusted gross income above $99,000 and married filing joint couples with no children and an adjusted gross income above $198,000 are not eligible for an economic impact payment.
Who is eligible for the economic impact payment?
Individuals with an adjusted gross income up to $75,000 and married filing joint couples with adjusted gross income up to $150,000 will receive the full payment. The economic impact payment begins to phase-out above these income thresholds and individuals with an adjusted gross income above $99,000 and married filing joint couples with no children and an adjusted gross income above $198,000 are not eligible for an economic impact payment.
How will the IRS determine the amount of my economic impact payment?
For individuals who have already filed their 2019 tax return, the IRS will use that tax return to calculate the economic impact payment.
For individuals who have not filed their 2019 tax return yet, the IRS will use information from their 2018 tax return to calculate the economic impact payment.
How do I receive an economic impact payment if I am not required to file a return?
Individuals who are not required to file a return may still be able to receive economic impact payment. However, in order to receive an economic impact payment, the individuals must file a tax return. Individuals who are Social Security beneficiaries who are not typically required to file a tax return will not need to file a return to receive the economic impact payments. These payments will automatically be deposited into their bank accounts. This only applies to individuals receiving social security.
How will I receive the economic impact payment?
The IRS will direct deposit the economic impact payment into the same bank account reflected on the individual’s most recent return.
The IRS does not have my bank account information, can I still receive the economic impact payment?
Yes. The IRS is currently working on implementing a web-based portal for individuals to provide their bank account information to the IRS. In the absence of the IRS having bank account information, a paper check will be issued for the economic impact payment.
How long is the economic impact payment available?
The economic impact payment is available throughout the rest of 2020. Therefore, if you have not filed a tax return for 2018 or 2019, you can still receive the economic impact payment when you file. However, the IRS encourages individuals to file their tax returns as soon as possible.
For additional questions related to the economic impact payment or assistance filing your tax return, please contact BMD Tax Law Attorney Tracy Albanese at tlalbanese@bmdllc.com or (330) 253-9195.