Amid the coronavirus outbreak, Congress is close to passing a stimulus package. The package will help both businesses and individuals.
The money is intended to supplement incomes as many cities and states are on lockdown for the foreseeable future.
Part of that package includes checks sent directly to Americans. The money will be tax free and can be used to support local businesses and pay bills during this time of need.
Here’s what you need to know.
How Much Money is It?
If you earn less than $75,000 per year, you’ll get a check for $1,200. That’s gross income, not take home pay.
For every $100 more you make above the $75,000 threshold, you’ll lose $5 of stimulus. This means that if you earn $99,000 or more, you won’t receive a check.
These numbers are doubled for married couples. A married couple can earn up to $150,000 combined to qualify for $2,400. If they earn more than $198,000, the checks won’t come.
There’s also an extra $500 stimulus check written per child under the age of 16.
Qualifying for Relief
To qualify for relief, you need a Social Security Number. You don’t have to have taxable income to get paid. But you will need to file a tax return if you haven’t before. These are being used to verify income levels.
If you don’t have citizenship or a green card, you won’t receive money. Additionally, if you are a dependent in a household, you don’t qualify.
You don’t need to have a full time job to receive a stimulus check. If you are a freelancer or work in the gig economy, you may still be eligible.
If you filed taxes in 2018 or 2019 and meet the income levels, you’re set. There are no special applications to complete as a freelance worker.
Many people have already lost their jobs during this economic downturn. Like the other provisions, so long as your 2018 or 2019 income was below $75,000, you’ll get the full $1,200 stimulus.
If you earned more than $99,000 in 2019 and recently lost your job, unemployment benefits are all you will qualify for.
Social Security Overlap
Even if you receive social security benefits, you are still eligible for the stimulus. As long as your gross income is below the threshold, you’ll get money.
Which Tax Return to Use?
Filing deadlines changed for 2019 taxes. The filing deadline is now pushed to July 15. This means many Americans still haven’t filed their 2019 tax returns.
If you haven’t filed your 2019 tax return yet, your 2018 tax return will be used instead. You must have filed taxes to qualify.
Your tax return verifies how much money you made. Calculations are based on total gross income, not adjusted income. That means tax breaks and deductions aren’t used in determining income totals for the year.
Receiving the Money
Finally, the checks will arrive in one of two ways. If the IRS used your bank account information to deposit your refund last year, they’ll send the money this way.
However, if the IRS doesn’t have your direct deposit info, you’ll get a check in the mail.
Expect your check to arrive within 3 weeks of the bill passing.
Paying Taxes on Money Received
Stimulus checks will be tax free. You do not need to declare them as income on next year’s tax returns.
This may be just the beginning of the stimulus packages Congress passes. Both senators and congressmen have expressed interest in passing more stimulus checks in the coming months as needed.
As more information is released about these checks, we will update the article.