The $2 trillion economic stimulus bill includes aid for American families facing financial difficulties due to the economic impact of the coronavirus. Most adults receive checks for $1,200, plus $500 for each of their children. The huge relief package will funnel $290 billion in direct payments to individuals and families. Households are expected to receive a check within weeks or months. That could be a lifeline for the millions or saw their incomes fall as people hide to avoid infection.
“Low and middle-income households would receive about 68 percent of payments,” Howard Gleckman, senior fellow of the Tax Policy Center, noted in a blog post. Here’s what you need to know about how the payments will work.
Who gets a check for $1,200?
The most important factor is your household’s annual income, as the package is aimed at helping low- and middle-income families. Some wealthier families may not receive stimulus control.
- Individual taxpayers get $1,200 each if their adjusted gross income (AGI) is less than $75,000.
- Individual taxpayers with AGIs over $75,000 receive smaller checks, with a $5 discount for every $100 in income over $75,000.
In other words, if your AGI is $80,000, your check will be reduced by $250 – the total payout would be about $950. To determine how much you get, you can use this stimulus check calculator by OmniCalculator.
Middle-income households earning between $51,000 and $91,000 would receive an average payment of about $1,810, or about 3% of their after-tax income, according to Gleckman.
What if I am married or head of the household?
- Married couples receive $2,400 if they earn less than $150,000 in adjusted gross income.
- Household heads receive $1,200 if they earn less than $112,500 in AGI.
- Payments are reduced by $5 for every $100 in income above these AGI limits.
How do I find my adjusted gross income?
Adjusted gross income shows how much of your income is taxable after certain deductions, such as your retirement contributions. Here’s how to find your AGI:
- 2018 tax year: Line 7 on your Form 1040.
- Tax year 2019: line 8b of your Form 1040.
Do Kids Get a $500 Check?
Yes. Taxpayers with dependent children receive a payment of $500 for each child, which is not determined by income. In other words, taxpayers get a payment of $500 for each of their children, regardless of how high their income is.
However, there is a catch: only children who have not yet turned 17 are eligible.
I have not yet filed my 2019 tax. Does that matter?
New. The government will base its checks on your 2019 or 2018 tax returns. If you haven’t filed your 2019 taxes yet — and many people haven’t, since the IRS has postponed the tax filing deadline— the government will use your 2018 tax return to determine your incentive benefit.
When will I receive my check?
This is the great unknown. Congressional officials have said the checks could be in place in weeks, according to to Politico.
But issuing checks to millions of Americans is complicated, and payments may not arrive for months. Incentive payments issued in 2008 during the Great Recession took about three months after being approved in Congress to actually reach consumers, Janet Holtzblatt, senior fellow of the Tax Policy Center noted.
Who doesn’t get a check?
- High incomes without children. For example, individuals earning more than $99,000 drop out of the incentive plan entirely. Married couples earning more than $198,000 (and no dependent children) are also not eligible for payments.
- Non-resident aliens. Workers in the US without a green card are not eligible, according to the account.