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Congress has passed a $2 trillion coronavirus stimulus bill, and you’re probably already counting up the money you could receive in relief checks — if you’re eligible.
Generally, individuals who earn $75,000 or less qualify for $1,200 one-time payments, while couples making $150,000 or less may receive $2,400. Dependent children are eligible for $500 each.
That’s because the stimulus checks will go out based on your adjusted gross income for the 2019 tax year, if you have already filed your return. If not, the Treasury Department will use your 2018 return.
That may be little comfort to you if you earned above those thresholds in 2018 or 2019 and your work has suddenly disappeared because you have been furloughed or laid off.
This week, unemployment filings surged to a record 3.28 million.
It’s based on prior years, incomes that may have nothing to do with their current situation, said Jeffrey Levine, director of advanced planning at Buckingham Wealth Partners in Long Island, New York. It’s a real issue.
Any additional money someone is entitled to will eventually come to them when they file their 2020 tax return in the form of a credit against taxes owed. But those filings aren’t due until next year.
When you’re desperate for cash now, it does you no good to tell you, Well, don’t worry, when you file your return next April, you’ll get it back, Levine said.
The legislation calls for sending those payments electronically to the same accounts you authorized for previous refunds. But there’s a problem if you have closed that account since your last tax return.
If that information is not on file, a check will be mailed to you.
But your mailing address on file might not be current, either.
Working through those issues could delay how quickly you receive the funds.
In fact, some individuals may need to file a return in order to get a stimulus check, according to Jack Smalligan, senior policy fellow at the Urban Institute, a non-partisan think tank.
That goes particularly for low-wage workers or individuals with no income who haven’t filed returns, he said. The Treasury Department may ask those individuals to fill out a 1040-EZ form, even though they have no obligation to do so, in order to process their information.
I think that Treasury is going to have to opine on this pretty quickly, Smalligan said. I would hope that we would get something from them next week.
(Sources CNBC, Getty Images, Department of Labor)
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