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What you should know about the COVID-19 stimulus bill
Craig Patrick breaks it all down
TAMPA, Fla. - The Senate passed a mammoth $2.2-trillion economic rescue package steering aid to businesses, workers and health care systems engulfed by the coronavirus pandemic, an unprecedented response amid record new jobless claims and mounting evidence that the economy is in a recession.
A key component includes direct payouts to Americans. Most taxpayers will automatically get their cash, as will those on Social Security. Here are some specifics on how that will work.
Q: How do I know if I’m eligible to receive a direct payment?
A: You are eligible if you are a legal U.S. resident and filed a tax return for 2019 or 2018. The amount you receive is based on the adjusted gross income reported on your return.
Q: How much will I get?
A: $1,200 if you are an individual who made less than $75,000 a year, or $2,400 if you are a couple who made less than $150,000. If you made more than this, you will get a reduced amount. If you made more than $99,000 as an individual with no children or $198,000 as a couple with no children, you get zero. However, if you reported any dependent children on your return, you will get a refund of $500 per child.
Q: Are veterans eligible?
A: Yes, based on the formula noted above.
Q: Are seniors and/or retirees eligible?
A: Yes, based on the formula noted above.
Q: But I am a retiree on Social Security who did not draw enough to even file a return. Do I lose out?
A: You are still eligible. In this scenario, the Treasury will base your eligibility and refund on your social security benefits statement.
Q: Do I have to apply, or take any specific action to get a direct payment if I am eligible?
A: No. The Treasury Department will make decisions based on information you have already provided (for 2019 or 2018). If it determines you are due a direct payment, it will electronically transfer the money into your bank account (if you elected this option on your prior returns) or send you a check in the mail. (The IRS offers information about changing your address here: https://www.irs.gov/taxtopics/tc157)
Q: My adult child is disabled and I claim him as a dependent. Are we eligible for the $500 dependent refund?
A: No, the legislation specifically states any qualifying dependent must be 16 years old or younger.
Q: I reported too much money on my 2019 return to qualify for a relief payment, but now I am out of work and running out of money? Do I lose out?
A: As the legislation is written, yes.
Q: If I filed taxes for both 2019 and 2018, which return will the Treasury use to determine refunds?
A: 2019. The Treasury will use data from 2018 returns only if returns for 2019 have not yet been filed.
Q: I filed for 2018 and 2019. I made too much money to qualify in 2019, but would qualify based on my 2018 return. Which one will the Treasury use?
A: 2019.
Q: I filed for 2018 and 2019. I made too much money to qualify in 2018, but would qualify based on 2019 because my income dropped in 2019.
Which one will the Treasury use?
A: 2019
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Q: I filed for 2018 and made too much money to qualify. However, I would qualify for 2019 but have not yet filed my taxes. What is my deadline for filing taxes for 2019 in order for the IRS to base refund decisions on 2019 instead of 2018.
A: That is not clear. The legislation does not provide a specific date in which the Treasury will make these determinations. If you have not yet filed for 2019, but plan to—it depends on when exactly you transmit your returns, and when exactly the Treasury makes determinations.
Q: I am not a retiree on Social Security, and did not file returns in 2019 or 2018. Do I lose out?
A: Yes, you face the risk of losing out on a refund that you may be otherwise eligible to receive. Consider filing a return at least for 2018 as quickly as you can. It’s not clear when the Treasury will make determinations (the date is not explicitly stated in the legislation), so it may or may not be too late (depending on when you send in a return and when the Treasury department makes determinations on refunds).
Q: When will direct payments start to arrive?
A: The Treasury Department anticipates sending payments within three weeks of final passage (which currently puts us on pace for payments going out in mid-late April).
Q: How many direct payments will I receive if I am eligible.
A: Under this legislation, one.
Q: What if I did not receive a refund that I believe I am due? How do I know it didn’t get lost in the mail or was transferred to the wrong account?
A: The legislation requires the Treasury to send you a written statement in the mail (based on the mailing address it has on file) noting what you are due, and how & when the money was delivered to you. That notice will direct you how to respond if you think there was a misdirection of funds or an error.
Q: I am coping with a job loss. What kind of unemployment benefits will I receive from the state of Florida?
A: Florida has one of the lowest levels of unemployment benefits in the nation. Florida pays up to $275 a week for up to twelve weeks for qualifying job losses (it excludes some part-time workers). The number of weeks of eligibility is tied to the state’s unemployment rate, but by law cannot be adjusted upward for several months.
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Q: What kind of additional unemployment benefits might I receive from the federal government?
A: The federal relief legislation, includes a significant expansion of federal unemployment benefits to a) cover more people including seasonal, part-time, self-employed/ independent contractors and b) provide increased levels of compensation. Eligible applicants would get up to $600 per week from the federal government (in addition to state payments) for an additional 13 weeks. In Florida, that means a total of 25 weeks of unemployment benefits.