In these difficult times I am writing to share information on the well-publicized Economic Stimulus Payment that is about to get going:
Economic Stimulus Payments
What we know and the next steps
Single tax filers with adjusted gross income up to $75,000 will receive the full payment of $1,200; married couples filing jointly with adjusted gross income up to $150,000 will receive the full payment of $2,400. In both cases, an additional $500 will be received for a qualifying child (under 17 years of age). For tax filers whose income exceeds the thresholds, the payment amount is reduced by $5 for each $100 above the threshold. With that being said, single filers with no qualifying children will not receive a payment if their income is over $99,000 and joint filers with no qualifying children will not receive a payment if their income is over $198,000.
What About College Students?
If a college student is between the ages of 17 and 23, inclusive, and claimed as a dependent on a parent’s tax return, then the student will not receive a $1,200 stimulus payment and the parent(s) will not receive the additional $500 payment. If the college student is 16 or younger, then the parent(s) will receive the additional $500 payment as long as they provide more than half of the student’s total support for the year.
There have been many questions as to how non-filers will receive their payments, and also many questions as to how filers will receive their payments. In order to address these questions and concerns, the IRS partnered with the File Free Alliance to develop an easy-to-use tool that will help taxpayers who do not have a filing requirement enter basic information so they can receive their payments as soon as possible.
Who Should Use this Tool?
Taxpayers who did not file a tax return for 2018 or 2019, and who do not receive Social Security or other non-taxable payments including survivors, disability (SDDI), or survivor benefits and Railroad Retirement benefits.
Taxpayers who did not file a tax return for 2018 or 2019 because they are under the income limits and thus were not required to file.
What Information Will You Need?
- Full name, current mailing address and an email address.
- Date of birth and valid Social Security number.
- Bank account number, type and routing number, if you have one.
- Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one.
- Driver’s license or state-issued ID, if you have one.
- For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse.
Where Can I Find the Tool?
When Can I Expect My Economic Impact Payment?
Automatic payments are to begin being disbursed this week for eligible taxpayers who filed tax returns for either 2018 or 2019 and chose direct deposit of their refunds.
Eligible taxpayers who receive Social Security and other non-taxable payments will automatically receive a payment in the “near future.”’
How Do I Check the Status of My Economic Impact Payment?
The IRS is building a tool that is expected to be available for use later this week. The tool will allow taxpayers to check the status of their payment including the date their payment is scheduled to be deposited into their bank account or mailed to them. If the Economic Impact Payment has not yet been scheduled for delivery, the “Get My Payment” tool will allow taxpayers to provide their bank account information so they can receive their payment more quickly.
There is no qualifying income requirement, but there is a phase-out for payments
There is NO qualifying income requirement. Individuals with $0 of income are eligible for the payment provided they are not the dependent of another taxpayer and have a work-eligible SSN. Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Taxpayers with a lower 2020 AGI will receive a credit
The payment is actually an advance on a tax credit claimed on the 2020 tax return. If a taxpayer’s income is lower in 2020 than in 2019, any additional credit for which they are eligible will be refunded or will reduce the tax liability when the 2020 tax return is filed. As it stands, if your 2020 income is higher than the thresholds and you receive the payment, you will not need to pay back any part of the payment.
Taxpayers who owe back taxes will still receive the payment
While the IRS has not officially provided guidance on this, the Senate Finance Committee stated that the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past child support obligations that the states have reported to the Treasury Department.
IRS, today has Launched “Get My Payment” Web App
The U.S. Department of the Treasury and IRS has launched the “Get My Payment” web application today. The free app — which will be found at IRS.gov — will allow taxpayers who filed their tax return in 2018 or 2019 but did not provide their banking information on their return to submit direct deposit information. Once they do, they will get their Economic Impact Payments in their bank accounts quickly, instead of waiting for a check to arrive in the mail. “Get My Payment” will also allow taxpayers to track the status of their payment.
“Get My Payment” is an online app that will display on any desktop, phone or tablet. It does not need to be downloaded from an app store.
For taxpayers to track the status of their payment, they will need to enter basic information in the “Get My Payment” app:
- Social Security Number
- Date of birth
- Mailing address
Taxpayers who want to add their bank account information to speed receipt of their payment will also need to provide the following additional information:
- Their Adjusted Gross Income from their most recent tax return submitted, either 2019 (Form 1040, Page 1, Line 8b) for 2018 (Form 1040, Page 1, Line 7)
- The refund (2019: Form 1040, Page 2, Line 20) (For 2018: Form 1040, Page 1, Line 19) or amount owed (2019: Form 1040, Page 2, Line 23) (For 2018: Form 1040, Page 1, Line 22)from their latest filed tax return
- Bank account type, account and routing numbers
Treasury and the IRS encourage taxpayers to collect this information now, through their tax preparers or other means, so they can submit this information in the app as soon as it is launched and get their money fast.
Taxpayers who did not file a tax return in 2018 or 2019 can use “Non-Filers: Enter Payment Info Here” to submit basic personal information to quickly and securely receive their Economic Impact Payments.
COVID-19 SCAM ALERT:
There are no phone calls, no need to do anything but count the amount when it comes in the mail or is directly deposited sometime this month. If you do get a call, text or email from someone asking for your Social Security, checking account or credit card number, hang up. They’re trying to steal your money. Some victims, thinking they’re registering to receive assistance, are fooled into clicking on fake links that installed software on their computers that could access their bank and credit card accounts.
Another scam involves official-looking emails that pretend to be from the U.S. Small Business Association (SBA) or other government agencies. These include links claiming to take you to an application page for a grant or other assistance. Don’t click on them.
The current climate has given thieves a new twist on the old grandparent scam, as well. If someone calls or sends a message from an unknown number or email address claiming to be a relative or friend sick with COVID-19 and desperate for money, don’t panic. Reach out to your friend or relative directly and keep in mind that scam artists typically ask for payment via wire transfer or a gift card.
There are also thieves posing as employees of the U.S. Department of Health and Human Services (HHS) or another U.S. government department who say you must complete a mandatory online form in order to be tested for COVID-19. The scam is designed to steal personal, financial and/or medical information. DON’T FALL FOR IT .
You also want to be very careful before you donate to anyone trying to raise money to help those supposedly in need. ANYONE who asks you for money in cash, through a gift card or via a money wire transfer is a thief.
The same goes for those pitching new travel insurance that covers COVID-19 circumstances. Know who and what you’re dealing with before doing anything. In fact, go here first: NJ Division of Consumer Affairs Guidance .
“New Jersey residents need the financial relief that’s coming to them,” said Attorney General Grewal. “We want you to be able to spot a scam, so that the check you’re expecting from the government doesn’t turn into a blank check from you to a thief.”
"We are asking residents to rely only on information from trusted sources, and refrain from opening attachments or click on links from unknown sources," said Paul R. Rodríguez, acting director of the state Division of Consumer Affairs.
Grewal and U.S. Attorney Craig Carpenito late last month announced the creation of a federal-state COVID-19 Fraud Task Force to investigate and prosecute those who exploit the pandemic by defrauding others. Consumers who believe that they have been victimized by a COVID-related fraud should call the National Center for Disaster Fraud’s National Hotline at (866) 720-5721.
In closing, I hope all of you are doing as well as could be hoped for in these trying times. This is a constantly evolving situation and the websites provided will give you the most up to date information. Please contact me if there are any questions on the above VIA my email Michael@mgutscpa.com. Be well and hope to see everyone next year!
Very truly yours,
at the office of
Michael W. Gutwetter
Certified Public Accountant