We tried to answer major questions you might have about stimulus check
One of the most powerful economies of the world doesn’t tolerate long slowdowns. The US had worked out the way to cope with global recessions long before coronavirus hit the continent. Many Americans have received stimulus checks from the government more than once as an aid in critical periods.
After some debates, the US government has finally agreed on the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act). While about 80 million American taxpayers may have already gotten their bank accounts loaded with so-called “Economic Impact Payments” from the IRS, those unbanked or preferring paper checks are looking forward to when their turn comes.
SEE ALSO: Stimulus checks in the US & how they may affect the economy
How much money will individuals get?
The size of the stimulus checks is exceeding the similar aid payouts American citizens have received before during previous recessions.
Eligible adults earning up to $75,000 will receive a $1,200 check, $2,400 checks will go to joint filers – couples earning $150,000 or less, while families get an additional $500 for each child under the age of 17.
People with higher incomes will receive smaller rebates: $5 less per every $100 they make over the limits. For individuals, it phases out completely at incomes of $99,000 and above. The threshold set for the full stimulus check for couples filing jointly is $150,000 and $112,500 for single parents.
How to receive a stimulus check
In order for the authorities to estimate whether an individual is eligible for the stimulus check and determine the amount of the aid, citizens need to file their income tax return.
By and large, the payments will be based on 2019 data. However, since the tax filing deadline was delayed until July 15 rather than the traditional April 15 deadline, some Americans haven’t yet filed their 2019 returns. Their eligibility will be assessed by the most recent return they’ve filed, meaning the one for 2018.
Nevertheless, those Americans who expect not only a tax refund, but also a stimulus check should probably file that 2019 tax return as soon as possible unless their income goes over the limit.
If your 2019 income tops the determined thresholds, you may want to hold off within the given deadline. The upside is that consumers whose earnings increase beyond the $75,000 and $150,000 thresholds, won’t need to pay back their stimulus checks, tax experts say.
Ultimately, the IRS will define the size of the aid according to the 2020 tax return since the Economic Impact Payments are advancing on credits for 2020 taxes. Hence, it’s possible that consumers could receive even bigger tax refunds later if their income drops in 2020. That’s a very likely situation amidst the pandemic shutdown and increasing unemployment. Moreover, if you have a child in 2020 and claim them on your 2020 tax return, you’ll also get an additional $500 next year.
For those who don’t normally file tax returns, the IRS has prepared an online tool to register and determine eligibility.
Whether you file a tax return or use a tool for non-filers, you need to provide direct deposit information or choose a check as the payment type so that the IRS can send you a stimulus check.
Entering bank or financial account information will allow the IRS to quickly deposit your payment. Otherwise, your Economic Impact payment will be mailed to you as a paper check (that may linger sometime from May till September).
Sending paper mail on a large scale is quite challenging. Hence, it won’t be handled all at once. The IRS started sending paper stimulus checks on April 24. Each week, it plans to send approximately 5 million paper stimulus checks, starting with taxpayers with the lowest adjusted gross income.
How to update bank information with the IRS
Perhaps, you haven’t included your direct deposit information before but now you would like to add it so that you can receive the stimulus money sooner.
Whether you can change the bank information or not depends on the status of your payment. Use the “Get my payment” service tool to check it. The new service helps to provide as much money via direct deposit as possible and avoid mailing paper checks during the pandemic. When you visit the IRS website, you’ll be asked a few personal information details such as your SSN, date of birth, and address including the ZIP code.
If you receive an SSA or RRB Form 1099 or SSI or VA benefits, your information may not yet be available in this application. Be patient.
If the IRS hasn’t already sent you a paper check, you can still enter your bank account information for direct deposit.
The absence of banking information is not the only issue. The chances are, your banking details or mailing address may have changed, especially if you haven’t filed since 2018.
2019 Filers: The IRS will send your payment using the information you have provided with your 2019 tax return. To help protect against potential fraud, the tool does not allow people to change direct deposit bank account information already on file.
Only people who did not use direct deposit on their last tax return, or those having inaccurate direct deposit information that has resulted in a refund check being mailed, will be able to provide new information and speed up their payment.
If the given bank account has been closed, the bank will reject the deposit and your payment will be sent to the mailing address included in your file.
2018 Filers: If you need to change your account information or mailing address, file your 2019 taxes electronically as soon as possible. That is the only way to update your bank information.
If you have elected to split your refund between several accounts while filing, you cannot use the “Get My Payment” tool to designate which account to have your payment deposited in. The IRS will deposit the payment to the first bank account that you have listed on Form 8888, Allocation of Refund. If your direct deposit is rejected, your payment will be mailed to you as a paper check.
How to track your stimulus check
Using the “Get my payment” tool, anyone awaiting a stimulus check can see what day their payment is scheduled for and how it has been posted — whether by paper or electronically.
Data is updated once per day overnight, so there’s no need to check back more than once per day.
Get My Payment will display one of the following status messages:
1. Certain Payment Status (two variants)
- A payment has been processed, the payment date is available, and payment is to be sent either by direct deposit or mail.
You are eligible, but payment has not been processed and the payment date is not available.
- If “Get My Payment” indicates your payment is pending or has been processed, no changes can be made.
2. Need More Information – You are eligible for a payment, but the IRS does not have your direct deposit information. You will be given the opportunity to provide your bank information once you have properly verified your identity.
3. Payment Status Not Available – The service cannot determine whether you are eligible for payment at this time. For instance, you filed neither a 2018 nor 2019 tax return, or have done it recently so the return has not been fully processed. If you have filed your tax information recently, check back in 24 hours.
Why some checks may be delayed
Many eligible taxpayers will become depressed as they have been waiting in vain for a while now.
Although most payments have been sent, some money transfers were misdirected. It’s not that the IRS has sent Mr. Smith’s money to Mr. Black. However, electronic payments will keep bouncing back for numerous reasons.
People who have closed old bank accounts or used tax-preparation companies are having trouble receiving these payments.
When some taxpayers file their tax return, they may choose an option available from their tax preparer or software provider to help them with the refund settlement. The settlement products often include a prepaid debit card.
In some cases, the IRS says, “Your Economic Impact Payment may have been directed to the bank account associated with the refund settlement product and not your bank account.”
While customers have started to contact their providers about the issue, most of them like Jackson Hewitt, H&R Block and TurboTax deny any fault on their side. They suggest the IRS is to blame for the glitch. The company representatives saythe government has all the information it needs to process EIP transactions.
Although tax refunds through tax preparers are often provided through debit cards that are attached to temporary bank accounts, software providers claim to also include the client’s final destination bank accounts.
Another problem is that the “Get my payment” resource doesn’t always work as it should. Access may be temporarily denied due to high volumes of inquiries, or when the person has entered the wrong data multiple times.
In addition, there are scheduled maintenance periods when the service is unavailable.