What You Need to Know About the Government Stimulus Payment
By now you’ve heard that President Trump signed the new Stimulus Package into law, making it the largest-ever economic relief effort in American history. That’s great news for millions of Americans – but before you go checking your mailbox, there are a few things you need to know.
If you have a few extra hours on your hands and a desire to make your brain hurt, you can Google “copy of the stimulus bill” to get all the details. But we thought we’d save you the headache by highlighting the key points of what you need to know about the money possibly coming your way.
Who Gets It?
Most Americans – though not everyone – can expect to receive at least some amount in this one-time emergency cash infusion. That includes you IF:
- You have a valid social security number;
- You were NOT claimed as a dependent on someone else’s taxes;
- You filed your taxes in 2019,
- or in 2018 if you haven’t filed yet this year,
- or, if you were not required to file taxes in either of those years, the IRS will use your Social Security Benefit Statement, and;
- You made less than $99,000 (or $198,000 married/filing jointly) last year.
What if you haven’t filed your taxes in the past 2 years but you should have?
The short answer, unfortunately, is if the IRS doesn’t have your information, you won’t be getting a payment.
Now there are any number of reasons why you might have decided not to file, but if that’s you – it might be worth considering talking to a tax professional to go over your options. Yes, the IRS strikes fear into even the bravest, by-the-book people I’ve ever known (including tax people and CPAs). But by IRS reports, there are over 1 million households out there that are actually entitled to refunds – they just haven’t been claimed. What if one of those is you?
And if you do end up owing money? Well, there are repayment plans and “Fresh Start” programs available. It’s your decision, but whatever you decide DON’T go it alone. Talk to a tax professional. They can help you know your options and, if needed, negotiate a payment plan or other options.
How Much Will You Get?
That depends on your individual situation, of course, and how much you earned last year (or in 2018 if you haven’t filed your taxes yet for 2019). There are several moving parts involved here (it is, after all, the government we’re talking about), but once get past the legalese and government-speak it boils down to this:
One last important note – this payment is considered an advance “credit” on your taxes for 2020. What does that mean? Most importantly, it means it will NOT be considered or taxed as “income.” However, it will be used when determining your tax liability – or how much you owe – when you do your taxes next year. Think of it like the Earned Income Tax Credit, if you’ve been able to claim that before.
What Do You Have to Do to Get It?
Absolutely nothing. Well, probably nothing (I’ll get into that here in a little bit).
There is no application or sign up required to claim your payment. The IRS will process your payment based upon your past tax return(s) or Social Security Benefit statement. If you set up direct deposit for your last return, then the IRS will direct deposit this payment into the same account. If not, they’ll be mailing a check to the address you used on your tax return.
This is where we get to that “probably” part.
If you’ve changed your bank account or moved since that last tax return, you might have to do some tracking and, more than likely, it’s going to take a little longer for you to receive your money. The IRS will mail you a notice within a few weeks of processing your payment. That notice will give you the details about how (check or direct deposit) and where (bank account, address) the payment was made. If you can’t find it from there, it’s time to contact the IRS. You can also go online to the IRS website and print out an official change of address form to mail into them. It may or may not arrive in time to be corrected for this (again, this is the government), but it’s still a good idea.
And When Will You Get It?
Well, that’s a little harder to answer. Right now, we’re still waiting on specifics. Treasury Secretary Steven Mnuchin suggested it would probably be within the next 2 weeks – which would put it closer to mid-April. Chances are it will move pretty quickly (after all it is an election year). But also be aware that this is a big job and even though they have a lot of experience in processing payments, the IRS, like most of the country now, has many people working from home or remotely.
The good news is that it IS coming.
So What Do You Do in the Meantime?
If you’re unemployed due to the coronavirus, there is more good news for you. The new law is expanding our current Unemployment Insurance system and waiving key requirements. These changes could make a huge difference for you if you’ve been laid off, furloughed or had your hours cut due to the pandemic.
We’ll get into more details on that in our next post, so keep checking our website and follow us on Facebook for all the latest updates to keep you and your money safe now and always!
If you’re still working right now – then our focus is on tightening our belts. Making every dollar, every dime count. I know that doesn’t sound like a lot of fun – but the more we tighten now, the less this is going to hurt in the long run.
To help, we’ve put together a free online class on Thursday, April 9th at 2 p.m.: A Stay-At-Home Order for Your Money: Beginner’s Guide to Emergency Budgeting
(Sounds exciting doesn’t it?! Okay, so it’s not going to win an Emmy or Oscar, but it’s better than the movie Cats. Unless you really liked Cats and then it’s just like that! Except … without any actual cats.)
The class is free; the advice is priceless (aka FREE)!
For details or to register TODAY, click here or call us at 314-256-3995.