There was much anticipation surrounding the final approval of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) mainly because of the provision that grants certain eligible individuals cash payouts. The recovery rebates, as they are called, will be handed out to eligible American adults in at least 9 out of 10 households across America, according to the Tax Policy Center. So, what makes a person eligible for the payout and can those receiving Social Security income qualify?
Who Are The Eligible Individuals?
Most adults in the United States qualify to receive a stimulus check under the CARES Act. Of course, there are some stipulations in the Act for determining exactly who is eligible and who is not. So, as expected, there will be some people who will receive either a partial amount or no stimulus check at all. For the sake of the recovery rebate, the CARES act defines what is an eligible individual. There are only 3 instances in which persons are determined not to be an eligible individual:
- Nonresident alien: As defined by the IRS, a non-resident alien is an individual who is neither a U.S. citizen or U.S. national who has neither passed the green card test or the substantial presence test. These individuals might include, but are not limited to, a visiting professor who stays to teach for a time or a student attending college. There are some exceptions to the definition of a nonresident alien. Go to irs.gov to read the government’s exact definition of a nonresident alien and any exceptions. You also need to check the IRS website, call the IRS or consult a tax professional as to whether these exceptions would make a nonresident alien eligible to receive the stimulus payment.
- Dependents: Individuals of any age who receives more than half of their financial support by another person. These individuals are usually claimed on another person’s taxes such as children, non-working spouses, etc.
- Estate or trust: Both are non-human entities that define or control any money or property owned by a particular person at the time of their death and how those assets are passed on to stated beneficiaries.
How Much Will I Receive?
By now, most everyone knows that the recovery rebate will pay up to $1200 to each eligible individual adult. But in all things, there are exceptions. According to the CARES Act, the full $1200 dollars is available only to persons below a specific financial threshold. The limits are based on your Adjusted Gross Income (AGI) as reported on your 2019 tax return. Those taxpayers filing as follows and whose AGI is at or below the specific listed amounts shall receive the full $1200:
- Joint (paid as $1200 each – $2400 total) – $150,000 maximum AGI
- Head of household – $112,500 maximum AGI and
- Individual or other taxpayers not mentioned in #1 or 2 – $75,000 maximum AGI.
For those taxpayers with an Adjusted Gross Income greater than the minimum amounts listed above, subtract $5 for every $100 above these thresholds to determine your recovery rebate amount until there is a $0 payout. If you calculate a negative amount, this does not mean that you owe anything. Just expect that you will neither receive a recovery rebate nor owe any amount.
It should be noted that there are additional funds available to persons with qualifying children. An amount of $500 will be granted to taxpayers for each qualifying child. This will be an add-on to the maximum recovery rebate amount.
How Will I Get My Money?
The stimulus checks will be disbursed much as a tax refund. According to the Tax Policy Center, the Treasury Department will disburse the payments either by direct deposit or by check to your home. The method chosen on your 2019 tax return to receive a refund will determine if your funds are directed deposited or mailed. If you have ‘mail’ selected and want to switch to direct deposit, you may have the opportunity to change it. Stay tuned to the Coronavirus Tax Relief updates on the IRS website for further information.
Will I Receive A Check If I Didn’t File Taxes?
Yes, it is possible for you to receive a stimulus check even if you didn’t file a tax return. There are many people whose AGI will qualify them as an eligible individual, entitled to receive a recovery rebate check. However, you must have filed your 2019 taxes in order to receive a payout. If you have not filed a 2019 tax return, the 2018 return is acceptable.
So, what if you have not filed a 2019 or 2018 return? The CARES Act allows information to be used from Form SSA 1099 – Social Security Benefit Statement or Form RRB 1099, Railroad Retirement Board Benefit Statement. So, if you are receiving income from Social Security or Railroad Retirement, these forms can be used to qualify retirees and some Medicare beneficiaries to receive a stimulus check.
As stated on the Tax Policy Center website, if you have not filed either year’s tax returns nor do you have SSA-1099 or RRB-1099, you will not be eligible to receive the recovery rebate payout. However, you can still file your 2019 return to receive the check. According to the IRS, people who typically do not file returns will only need to submit a simple tax return to receive the stimulus payment. Continue to check the IRS website for more updates.
As each of us who are eligible for the payout receive the much-anticipated assistance, we must keep in mind that it is just that – assistance. This stimulus was granted to help those who are struggling financially due to COVID-19. Stay mindful to use the money wisely. For some, $1200 may only be enough to get through the April 30th mandatory quarantine and others maybe not that far. If the quarantine guidelines extend beyond April 30th, some may have to seek other means of providing for basic needs. Make sure to download my free 4-Part Spending Plan to help organize and plan out your funds for this time. I pray we all stay mindful, prayerful and Centsable about our finances in this time.
Due to these uncontrollable circumstances, we as a people always face the challenges of survival to overcome. I feel as if I’m overqualified under educated and misunderstood all at the same time. They make it hard for us to function. What can we do besides pray have faith and trust in The Most High who created and makes a way out of no way by providing for us under any situation.
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