What You Need to Know about the Economic Impact Payment

As a result of the recent passing of the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act by the U.S. Congress and signed by the President, the Treasury Department and, the Internal Revenue Service has announced that distribution of economic impact payments will begin in the next three weeks. This is a 2 trillion dollar stimulus bill designed to aid businesses, large and small alike as they manage the effects of the stay at home orders being issued across the country. Additionally, the stimulus package offers relief to individuals and families as they face unprecedented economic impact due to, lay-offs and increased expenses due to the COVID-19.

What you need to know about the Economic Impact Payment | CowderyTax.com #taxes #federalpayment #covid19 #coronavirus #economicimpactpayment

This economic impact payment will affect nearly all Americans. That means you are very likely to receive a substantial payment from the Federal Treasury Department. This payment is to begin distribution within the next three weeks. The payment will be processed and delivered similarly to how tax refunds are issued.

Who will receive the economic impact payment?

Eligible tax filers who have a gross adjusted income of up to $75,000 for individuals and $150,000 for married couples who file joint returns will be getting $1200 per individual and $2400 for couples. Additionally, each family will receive up to $500 per qualifying child.

For anyone making more than those limits, the payment amount decreases by $5 for each $100 above the set thresholds. Individuals whose income exceeds $99,000 and $198,000 for joint filers with no children are not eligible.

All Social Security recipients as well as railroad retirees who aren’t not required to file a tax return are also eligible and will not be required to file a return.

How will I receive my payment?

The IRS will automatically send this payment to any eligible taxpayer who filed tax returns for either 2019 or 2018. If you did not file your tax return for either of those two years, you can still do so.

For the 2019 tax filing year the tax deadline to both file and pay federal income taxes has been extended to July 15, 2020. Many states have followed suit in extending that deadline for state returns.

That said, if you anticipate receiving a tax refund for 2019, it is in your best interest to go ahead and file sooner rather than later. On the one hand, it will initiate your tax refund, but will also give the IRS the needed information to send your economic impact payment as well.

How will the IRS distribute my payment?

The Internal Revenue Service will calculate your payment based upon either your 2019 or 2018 tax return, whichever is the most current return they have on-file. Most Americans will not need to take any action for this payment to occur.

For anyone who has filed their 2019 tax return, the information on the return will be used to calculate the payment. This payment will be sent directly to the bank account you used for a direct deposit refund when you filed your return.

If you haven’t yet filed your 2019 tax return the IRS will use the tax return you filed in the 2018 filing season.

What if my direct deposit account is not on file?

For anyone who hasn’t recently filed with the IRS, the Federal Treasury Department is in the process of setting up a website with a portal for individuals to provide banking information to the IRS so that payments can be processed. We will update you with any information and website addresses as those are made available.

This will allow for payments to be made as quickly as possible, rather than anyone having to wait for checks to be sent in the mail.

What if I am not required to file a tax return?

Even in you are not required to file a tax return due to under-earning the minimum requirements, you are post-retirement age, and/or are a Social Security benefits recipient you will still be able to receive your payment.

Simply follow: Free File Economic Impact Payment.

Each individual citizen, or permanent resident, who is not required to file a tax return will receive a payment of $1200.

Both the U.S. Department of the Treasury and the Internal Revenue Service have announced that individuals who receive Social Security benefits, who aren’t required to file tax returns, will receive their payments by  automatic deposits into their bank accounts. Those individuals will not need to file an abbreviated tax return.

If I haven’t filed how long will the Economic Impact Payments be available?

During this time, our office is closed to foot traffic. However, we are here and able to help you file your taxes using remote, electronic services. The IRS has released a simple way to file for the economic impact payment. Simply follow: Free File Economic Impact Payment.

It is entirely possible to complete the process remotely.

You can deliver your tax documents to us by any of the following options. 

  • Scan your documents and email them to us. We recommend using an online file transfer system. We suggest Google Docs, but Dropbox or other cloud-based services may work as well. Contact us and we can help you to determine the best way to manage online file transfer.
  • Mail your documents to our office using the USPS, or any other mail delivery service.
  • Drop off your documents to the office. We’ll receive them, and file your documents on your behalf.

While it is important to remember that the tax return filing has been extended to July the 15th, it’s also important to note this one-time economic impact payment is available to all eligible American citizens through the rest of 2020. We’re happy to help you prepare your documents at any time.

For any additional information feel free to contact our office. We are always happy to help wherever possible.

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