The IRS began sending out the first wave of stimulus payments this weekend.
The IRS officially deposited the first wave of direct stimulus payments this weekend, the agency announced on Twitter.
The one-time “Economic Impact Payments,” which could be as much as $1,200 for an individual and $2,400 for a couple, are part of a recent stimulus package approved by Congress to help workers and businesses combat the widespread economic fallout of the coronavirus outbreak. People with children are eligible for an additional $500 per child under the age of 17.
The payments are slated to be sent via either direct deposit or the mail in the coming months, though direct deposit is expected to be much faster. The payments are not subject to taxes and will not affect individual tax refunds for the upcoming year.
As the IRS starts sending out payments, many questions have emerged about who will qualify for them and the timing around their distribution. Vox has some answers, below.
Who will receive the $1,200 direct payments?
Direct payments will be distributed based on the adjusted gross income reported on an individual or couple’s 2018 and 2019 tax returns, broken down as follows:
- Most adults who make less than an adjusted gross income of $75,000 annually will receive a $1,200 one-time payment. Payments will go out to individuals whose income is as much as $99,000, but those bringing in more than $75,000 won’t receive the full amount.
- Married couples without children will receive a total of $2,400 if their joint income is less than $150,000 annually. Payments will go out to couples whose income is as much as $198,000, but those bringing in more than $150,000 won’t receive the full amount.
- Households with children will also receive $500 for each child if the parent’s or parents’ income qualifies for these payments and if the child is under age 17.
- Taxpayers who have filed as “head of household” in the past will receive the full $1,200 if their income is less than $112,500. Payments will go out to heads of household whose income is as much as $136,500, but those bringing in more than $112,500 won’t receive the full amount.
- The amount of the direct payments for individuals making more than $75,000 and couples making more than $150,000 will decrease $5 per every $100 an individual makes over $75,000. An individual with an income of $85,000, for example, would receive a $700 payment.
- Those who did not file a tax return in 2018 or 2019 will need to complete a separate online form in order to receive the direct payment. Individuals must also have a Social Security number to qualify for a direct payment.
For more information, check out this explainer from Vox’s Dylan Matthews.
Who will not be eligible for a direct payment?
- Adults who are claimed as dependents by other adults, including many college students, will not be eligible for a direct payment.
- As Vox’s Nicole Narea reports, many immigrants are excluded from the program. People in households that include unauthorized immigrants are among those that could be cut out of the program, unless one of the partners in the household has served in the military in the past year. According to the Associated Press, immigrants who pay taxes but do not have legal status are also not eligible.
How can I obtain my direct payment?
- For many adults, there’s no additional action required to obtain the direct payment: If people have filed a tax return in 2018 and 2019, and included their direct deposit information in these filings, the payment will be automatically deposited by the IRS in the coming weeks.
- For those who have filed a tax return in 2018 or 2019, who did not include direct deposit information in those filings, the IRS is expected to roll out an online tool that people can use to submit these details and expedite their payment. This “Get My Payment” tool could go live later this week. Those without bank information on file with the IRS who do not fill out the form can expect to receive payments in the mail.
- For those who have not filed tax returns in either of these years who receive Social Security or benefits, there is no need for an additional tax return. The IRS will use the information in existing files to send the payment. The agency intends to begin sending payments to Social Security beneficiaries who have direct deposit set up beginning in mid-April.
- For those who not filed a tax return for either of those years because their gross income is below the $12,200 threshold or for other reasons that mean they aren’t required to file taxes, the IRS now provides an online form for people to submit their information so they can receive these payments. That form can be accessed through this link.
Information required for this form includes one’s Social Security number, name, address, and details about dependents. Completing this form does not put people on the hook for any taxes, but it is required to obtain the direct payment, and including bank account deposit information can expedite the processing of that payment.
When will people receive direct payments?
The answer to this question depends on if you have filed taxes in 2018 or 2019.
- If you have filed taxes in either of those years — and the IRS has your bank account information — the direct payments are expected to be shared via direct deposit within the next few weeks. The IRS began depositing these payments in the second week of April.
- The IRS is also able to mail checks directly to the address listed on the tax return, but mailed checks are expected to take up to 20 weeks, or five months. The Post indicates that individuals receiving checks by mail may not get up them until as late as September. The earliest round of checks distributed via mail will be sent in early May. Checks will be mailed out to the lowest-income individuals first.
- For those who have to submit new information to the IRS to obtain these payments, there’s expected to be some slight delay in their receipt as well, though it’s unclear at this point how long it will be.
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Author: Li Zhou