March 31, 2020
By Matthew E. Miller, CPA, MBA
On Friday, March 27, 2020, Congress passed and the president signed a $2T multi-purpose stimulus package (CARES Act). Over the next several days, we will send out brief one topic newsletters to inform you of important changes to filing and payment dates, as well as, tax law changes effecting the 2019 and 2020 tax years.
The IRS has set up a special Coronavirus page on its website with up to date information.
You have no doubt read or heard that the recovery bill includes payments to taxpayers. These “Recovery Rebate” payments are offered to assist taxpayers with expenses of daily living; rent, food, utilities, etc. Eligible taxpayers will receive payments of $1,200 (Single) or $2,400 (Married). Taxpayers will receive an additional $500 per qualifying child.
To be eligible for the payment, taxpayers must have adjusted gross income of less than $75,000 (Single), $112,500 (Head of Household) or $150,000 (Married). For taxpayers over the threshold, stimulus payments are reduced by 5% for income over each threshold.
Adjusted Gross Income will be determined from the taxpayers 2019 income tax filing. If the taxpayer has not filed their 2019 return, payments will be made based on the taxpayer’s 2018 income tax filing.
Taxpayers will receive the payment by electronic deposit into the bank account listed on the last tax return filed. If taxpayers have not used electronic payments or refunds on their 2019 or 2018 income tax return, a check will be mailed to the address listed on the taxpayer’s income tax return.
If you are not signed up for direct deposit with the IRS you can follow this link to the IRS website for instructions.
The government plans on issuing stimulus payments within the next two to three weeks. Our expectation is that taxpayers will receive payments between mid-April and April 30th.
There are many unique situations that will affect a taxpayer’s eligibility. We will closely monitor information regarding the administration of these “Recovery Rebates”. We will republish this newsletter as additional information becomes available.
Our wishes to you and your family for your health and safety.