Everything you need to know about the Economic Impact Stimulus Payment
The Economic Impact Payment is actually a refundable credit (refunded even if no tax liability) given on the 2020 return subject to the AGI limitation and phase-out. However, the IRS is issuing advance payments based on the 2019 return if already filed. If the 2019 return hasn't been filed then they will use the 2018 return as the basis. Social security recipients will automatically receive the advance payment even if they haven't filed a return.
Taxpayers will receive the full Economic Impact Payment if their AGI doesn't exceed:
$75,000 for individuals
$112,500 for head of household filers and
$150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
$75,000 and $99,000 if their filing status was single or married filing separately
112,500 and $136,500 for head of household
$150,000 and $198,000 if their filing status was married filing jointly
*AGI is Adjusted Gross Income - this can be found at line 8b of 2019 Form 1040 or line 7 of 2018 Form 1040.
Am I eligible for the Economic Impact Stimulus Payment All US citizens and green card holders who have a work eligible social security number and aren't claimed as a dependent by another taxpayer are eligible. This includes US citizens and green card holders who reside outside of the US. The refundable credit and advance stimulus payment are subject to phase-out for higher income taxpayers based on adjusted gross income. The credit amount is $1,200 for individual, head of household, and married filing separate filers, and $2,400 for married filing joint filers. In addition, taxpayers are eligible for an additional $500 per qualifying child.
Will I receive the Economic Impact Stimulus Payment if I don't normally file a tax return? If you aren't normally required to file a tax return because your income is below the filing thresholds then you will need to go to the IRS website and provide certain information in order to get the advance payment. Navigate to this IRS web page and click the "Non-Filers: Enter Payment Info Here" button. The information you must submit is listed below the button.
What if I already filed a tax return, can I use the IRS Non-Filers tool? If you are required to file a 2018 or 2019 return because your income is above the filing thresholds then you aren't eligible to use the Non-Filers tool.
If you filed a 2018 or 2019 return and had a refund that was direct deposited into your bank account then the IRS has your bank account information and the IRS will direct deposit your advance payment. If you didn't have a refund direct deposited on either return then the IRS doesn't have your bank account information, a check will be sent to the address you used on the last return you filed. However, you can provide or update your US bank account information by clicking the "Get My Payment" button by navigating to this IRS web page
You can also use this tool to check on the status of your payment. If the check has already been sent then there is no way to change it to direct deposit so it is recommended to check the tool now. You must file your 2018 or 2019 return before the end of 2020 to get the advance payment. You will then receive your advance payment based on that return filed. No advance payments will be made after 12/31/2020. If you don't receive the advance payment because you failed to file a 2018 or 2019 return before the end of 2020 you will still be eligible to claim the refundable credit on the 2020 return subject to the AGI limitations and phase-outs.
What happens if I receive the Economic Impact Payment but was not entitled to it?
For taxpayers who are required to file a 2020 return there will be a reconciliation of the credit allowed on the 2020 return versus what was paid in advance. If the taxpayer is allowed a greater credit on the return than the advance payment, then the difference is refunded to the taxpayer. If the allowed credit on the return is less than the advance payment it isn't clear yet what would happen. Either the taxpayer has to pay back the overpaid advance payment or it will be forgiven. The legislation doesn't say. The IRS will likely issue regulations regarding this later......