Tax Relief Checks May Be On the Way Soon - How Much Will Yours Be?
Are you familiar with the "Five Ws"? In school, they're taught as the five questions to ask about any topic. After Congress passed the CARES Act COVID-19 relief bill and it was signed by Trump, it appears taxpayers may be getting checks in the mail sooner rather than later. Have questions? We have (tentative) answers. (Stay tuned for updates as guidance is released by the Treasury)
- WHO - Adults and their children
- WHY - To provide relief during the Coronavirus pandemic
- WHAT?! - Yes, that's right!
- WHERE - Paper checks will be mailed to your address used on your recent tax return. If you used direct deposit on your recently filed prior return, directly to your bank account
- WHEN - The payments are anticipated to be delivered within two months via check, or perhaps more quickly if by direct deposit.
- HOW (MUCH) - The stated amounts are $1,200 per adult and $500 per child:
- Single Adult: $1,200, with phaseout if your AGI is over $75,000
- Married Couple: $2,400 with phaseout if your AGI is over $150,000
- Head of Household Adult: $1,200 with phaseout if your AGI is over $112,500
- Children: $500 per child, and 'child' is based on the 'child tax credit'. This means that your 18-yr-old high school son, daughter that is a sophomore in college, dependent father that lives with you, or 25-yr-old son who is still finding his way from your house won't be eligible.
- So, a couple with two middle schoolers and a college student will get $3,400.
BUT WHAT ABOUT - there are a lot of questions, some with answers and some yet to be defined
- Phase-Out: If your income is over the threshold, you lose $5 per $100.
- Taxable: These payments are not taxable, but a tax credit advance.
- Moving: If you have moved and are concerned the IRS may not have the correct address on file, you can always file a Form 8822 to notify them of the change
- No Tax Return: Even if you didn't file a tax return because of reasons such as you're retired, you didn't have enough income, or get SSI benefits, you should still be eligible.
Some details of the CARES Act may still need refining, but the bulk of the payments is defined. Watch for guidance from the Treasury (especially as it pertains to 2020 tax returns). Stay up-to-date!