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Stimulus news

Congress has passed an economic relief plan which will provide one-time payments to most households.

The Tax Foundation, which is a DC-based thinktank, estimates that over 93% of Americans will be eligible for a check from the stimulus package.

The plan provides $1,200 for each adult and $500 for each child under 17.  The payments go to almost any adult with a Social Security number, as long as they aren’t dependents of someone else.  However, there are requirements to receive stimulus checks.

Payments start phasing out for those with income above $75,000 in adjusted gross income for individuals, $115,500 for heads of households (typically single parents), and $150,000 for married couples.  The payments are reduced above those levels.

For people with no children, the benefit disappears at $99,000 for individuals and $ 198,000 of married couples.

Not everyone will be required to have filed an income tax return for 2018 or 2019 to receive the stimulus. Low-income individuals on Social Security are not required to file a tax return since they would not have taxable income.  If they received an SSA-1099 form ( the Social Security benefit statement), the federal government may be able to give them a stimulus by the method they usually receive their Social Security payment.  The IRS will have the ability to get information from the Social Security Administration so these people may not be required to file tax returns to get the stimulus.  Details will be provided at a later date.

Retirees and people on disability are also eligible for the stimulus.

Treasury Secretary Steven Mnuchin said the IRS could start issuing payments within three weeks.  The agency has not announced a schedule.  People will receive their stimulus fastest who have filed 2019 tax returns with direct-deposit information than those people who receive paper checks.

The government will use 2019 tax returns to determine the payment amounts and 2018 tax returns if 2019 returns have not been received.

People who haven’t filed tax returns can still file for 2019 to make sure the government has their updated bank account information as well as recent births, deaths, marriages, divorces, and moves.

The majority of people who will be excluded from receiving a payment are the wealthy, nonresident aliens (foreigners who do not hold a green card), and dependents who can be claimed on someone else’s tax return.

The payments are not taxable.  However, it is possible that someone may have to pay back some of the money if their income is significantly more than what it was based on from the 2019 or 2018 tax return.

The IRS will provide updated information on its website about the process of the stimulus payments but is urging people not to call yet.

David Zubler is a tax accountant in East Tennessee, the author of four books, and a philanthropist.  All of his proceeds from the books go to a charitable foundation he created for underprivileged children.  He is also the founder of Your Tax Care which provides tax education. David can be reached for questions and consultation at yourtaxcare.com.