As Coronavirus (COVID-19) continues to disrupt the U.S. economy, many have turned to the federal government for hope. To help provide relief, the Coronavirus Aid, Relief and Economic Security Act (CARES) — a $2 trillion stimulus package to help individuals, families and businesses— was signed into law.
This relief will be taking many shapes over the coming months, such as:
- Widespread stimulus legislation, including efforts such as stimulus checks, mortgage relief for those adversely impacted by the economic slowdown, student loan interest relief, and more.
- The Federal Reserve has announced actions to stabilize and backstop the economy.
- The IRS is providing relief to taxpayers by extending most tax filing and payment deadlines to July 15, 2020.
But how do some of these efforts work and who will they directly impact? Let's take a look at the 2020 stimulus checks, how they work, who qualifies, how to get one, and how your taxes will be affected.
What is a stimulus check?
In its simplest form, a stimulus check is a rapid, direct cash transfer from the federal government to households. This can be one of the swiftest ways to put money back into the pockets of people dealing with the economic impact of the Coronavirus outbreak.
Who qualifies for a stimulus check and how much will I receive?
According to the IRS, approximately 80% of Americans will be eligible to receive full or partial stimulus payments through the CARES Act. If you have an adjusted gross income (AGI) of up to $75,000 ($150,000 married filing jointly), you should be eligible for the full amount of the recovery rebate.
For tax filers with income above these amounts, the stimulus payment decreases by $5 for each $100 above the thresholds. The stimulus check rebate completely phases out at:
- $99,000 for single taxpayers,
- $136,500 for those filing as Head of Household and
- $198,000 for joint filers with no kids.
Your eligibility will be based on information from your most recent tax filings (2018 or 2019). Use our Stimulus Check Calculator to see if you qualify and how much you can expect.
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Where do I find my Adjusted Gross Income (AGI)?
Your adjusted gross income (AGI) is your gross income, such as wages, salaries, or interest, minus adjustments for eligible deductions, like student loan interest or your IRA deduction, and can be found on line 8b of your 2019 Form 1040.
How do I get my stimulus check?
Stimulus checks will be based on information from your most recent tax filings, either tax year 2019 or 2018 (if you haven't filed this year). The IRS will use your adjusted gross income information in the latest tax return filed (2018 or 2019) to determine the amount of your stimulus payment and will deposit your stimulus payment based on the latest direct deposit information.
- If your tax return doesn't indicate a direct deposit account, you'll receive a paper check.
- If you're not required to file and you don’t receive Social Security income or Supplemental Security Income (SSI) you can provide the IRS with the information they require to issue a stimulus payment using TurboTax Stimulus Registration Product.
How do I update my direct deposit information with the IRS to receive my stimulus check?
The IRS won’t have your direct deposit information if you didn’t provide it on your 2018 or 2019 tax returns, but you can use the IRS Get My Payment tool to check your payment status and confirm your payment type (direct deposit or check). If the IRS already has your direct deposit information and the IRS Get My Payment tool shows your payment as pending or processed, you can't use the tool to change your direct deposit information.
How will I receive my stimulus check if I don’t have direct deposit setup with the IRS?
If you don’t have direct deposit a paper check will be mailed to you.
When will I receive my stimulus check?
The IRS began sending stimulus payments, with the first payments scheduled to hit accounts on April 15. To find out when your stimulus check is coming, visit the IRS Get My Payment tool.
Do I need to file my taxes to get a stimulus payment?
If you're required to file a tax return, the IRS will use information from your most recent filed tax return (2018 or 2019) to issue your stimulus payment. Taxpayers who earn income more than the IRS income thresholds for filing are required to file a tax return.
Some of the most common income thresholds for taxpayers under 65 in 2019 are:
- $12,200, when filing Single
- $18,350, when filing as Head of Household
- $24,400, when married filing jointly and both you and your spouse were under 65 at the end of 2019
If you're 65 years of age or older (in 2019), common thresholds include:
- $13,850, when filing Single
- $20,000, when filing as Head of Household
- $27,000 combined gross income, when married filing jointly and both you and your spouse are 65 or older.
You're also required to file a tax return if you:
- Are self-employed with a net income of $400 or more.
- Are a dependent with unearned income of more than $1,100 and earned income of more than $12,200.
- Received an advance payment of the health coverage tax credit.
- Owe taxes on an IRA or Health Savings Account.
If you're not required to file, you can use the TurboTax free Stimulus Registration Product to provide the IRS information needed so that you can receive a stimulus payment.
What if I receive Social Security or Supplemental Security Income?
Not everyone needs to file to get a stimulus payment. If you receive Social Security retirement, disability or Railroad Retirement income and you're not typically required to file a tax return, you don't need to take any action. The IRS will issue your stimulus payment using the information from your Form SSA-1099 or Form RRB-1099 via direct deposit or by paper check, depending on how you normally receive your Social Security income.
If you receive Supplemental Security Income (SSI), you'll automatically receive a stimulus payment with no further action needed. You'll generally receive the automatic payments by direct deposit, Direct Express debit card, or by paper check, just as you would normally receive their SSI benefits.
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Should I file my 2019 taxes now?
The IRS already began issuing stimulus payments based on your latest filed tax return (2018 or 2019). If you didn't file your 2019 taxes, they used information from your 2018 taxes. If you're required to file a tax return and haven’t filed your 2019 taxes, you may want to consider filing since you may be eligible for a tax refund. Last tax season, about 72% of taxpayers received a tax refund and the average tax refund was close to $3,000.
Are stimulus checks considered taxable income?
The stimulus check will be paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount.
- If you're underpaid based on your 2020 income, you may receive more tax credit when you file your 2020 taxes.
- If you're overpaid, you don’t have to pay it back.
For example, if you received $700 as an individual based on your 2019 return, but when you file your 2020 tax return, it shows your income took a hit and you should have received a $1,000 stimulus check, you would receive an additional $300 credit on your 2020 return.
Let TurboTax keep you informed on the latest information on how taxes are impacted by COVID-19 relief including the most up-to-date information on tax filing deadlines, visit our Coronavirus Tax Center.