The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides for Economic Impact Payments to households of up to $1,200 per adult (must meet income guidelines) and $500 per child under 17 years old.
The Economic Impact Payment (EIP) is administered by the United States Department of Treasury through the Internal Revenue Service (IRS).
Be on the alert for possible scams. The IRS will not call, text, email or contact individuals on social media asking for personal or bank account information, even related to the economic impact payments or refunds.
Description of the Payment
The Coronavirus Economic Impact Payment is a federal one-time direct cash payment up to a maximum of $1,200 per eligible individual, and $500 per eligible minor child (under 17). There is no limit on the number of qualifying children included in the economic impact payment.
Individuals will receive the maximum payment if the household’s adjusted gross income (AGI) is less than:
- $75,000 for individuals or married couples filing separately
- $112,500 for head of households
- $150,000 for married couples filing jointly
Payments will be gradually reduced if adjusted gross income is between
- $75,000 and $99,000 for individuals or married couples filing separately
- $112,500 and $136,500 for head of household
- $150,000 and $198,000 for married couples filing jointly
- The amount of the payment will be based on the taxpayer’s Adjusted Gross Income (AGI).
For higher income individuals the payment amount is reduced by 5% of the amount that one’s adjusted gross income exceeds $75,000 ($112,500 for taxpayers filing as head of household or $150,000 for taxpayers filing a joint return), until it is $0.
Qualifying for the Payment
Eligible individuals must have a Social Security number. Individuals with an Individual Taxpayer Identification Number (ITIN) are not eligible.
Families are ineligible if their tax return included someone with an ITIN, even if there is a member with an SSN. There is an exception, if either spouse is a member of the U.S. Armed Forces at any time during the taxable year, in which case only one spouse needs to have a valid SSN.
- Immigration Status, visit: https://www.irs.gov/individuals/international-taxpayers/determining-alien-tax-status. Please note: the payment does not count towards public charge for immigration purposes.
- Adjusted Gross Income (AGI) must fall below guidelines, listed above
- Not be a dependent of another taxpayer
Visit: https://www.irs.gov/coronavirus/economic-impact-payments for a tool to help determine eligibility.
On September 24, 2020 the US District Court for Northern California issued an injunction requiring the Federal government (the U.S Department of the Treasury and the Internal Revenue Service) to stop withholding CARES ACT Economic Impact Payments (EIP) from incarcerated individuals. According to a Treasury Inspector General report issued in May 2020, this impacts at least 80,000 individuals who are owed $100 million in payments. Information on the IRS’ information center website is being updated and can be found here: https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility-and-general-information.
For the U.S. territories, individuals should contact their local tax authority with questions about these payments. Please note when on their website search using the term “Economic Impact Payment” or “stimulus payment.”
Accessing the Payment
Most qualifying households will receive the payment automatically, but there will be some households that will be required to apply, details are included below.
Most qualifying households will receive the payment automatically, but there are some households that are required to apply, details are included below.
- Qualifying households who have filed a federal tax return will automatically receive payment; they do not have to take any action.
- The payment is based on the taxpayer’s 2019 tax return, if filed; if the 2019 return has not yet been filed, the IRS will use the information from their 2018 return.
- If people have not filed a tax return in 2018 or 2019, go to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free for free online filing options.
- The tax filing deadline has been extended to July 15, 2020. If a household has not filed for a tax return in either 2018 or 2019, they have the opportunity to file their 2019 tax return until July 15th. Once the household has filed for the tax return, they are eligible for an automatic payment, if they qualify.
- Social Security retirement, Social Security disability (SSDI), or survivor beneficiaries who typically are not required to file a tax return
- However, SSDI beneficiaries who began receiving payment as of Jan. 1, 2020, and who did not file a tax return in either 2018 or 2019 will need to file a request for Economic Impact Payment, https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here.
- Railroad Retirement and Survivor beneficiaries who typically are not required to file a tax return
- SSI recipients who typically are not required to file a tax return
- Recipients of non-taxable VA benefits who typically are not required to file a tax return.
These include both veterans and survivors who receive compensation and pension benefit payments from the VA.
HOUSEHOLDS REQUIRED TO TAKE ACTION – THE NON-FILERS
- Some individuals/families are not required to file a tax return, but are not included in the automatic payment and thus, must apply for the EIP payment.
- To determine whether an individual/family is not required to file a tax return, visit: https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return.
- Individuals/families not required to file a tax return should complete the Non-Filers: Enter Your Payment Info Here application found on the IRS website at: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here.
- Households not subject to the requirement of filing a tax return include:
- Households with a gross income under $12,200 ($24,400 for married couples). This includes people who had no income, or
- Cash Assistance (Public Assistance) recipients.
- Individuals/families required to file a tax return and who have not so, have until July 15th to do so.
- People can visit: https://www.e-file.com/ to file their taxes for free.
Households required to take action must act by November 21, 2020 to receive the Economic Impact Payment. Anyone who misses the November 21st deadline will need to wait until next year and claim it as a credit on their 2020 federal income tax return.
Beginning two weeks after filing their application they can track their status by visiting: https://www.irs.gov/coronavirus/get-my-payment#_blank.
For assistance in filing taxes as well as completing the Non-Filer application contact:
- NYC Free Tax Prep go to http://www1.nyc.gov/site/dca/consumers/file-your-taxes.page.
- To locate sites, go to https://a866-dcwpwb.nyc.gov/ftps_map.
- For assistance in filing 2018/2019 taxes visit: https://www1.nyc.gov/site/dca/consumers/file-your-taxes.page
- To book an appointment visit: https://www1.nyc.gov/site/dca/consumers/get-free-financial-counseling.page
- NYC Financial Empowerment Centers
Claiming the $500 for Qualifying Children: The $500 EIP per child is not automatic for Social Security & SSI beneficiaries, as well Railroad retirement beneficiaries and those with non-taxable VA benefits who have qualifying children under age 17 who have not filed a tax return.
To receive the $500 EIP for eligible children, SSI and eligible VA beneficiaries must have applied by Tuesday, May 5th and Social Security Disability and Railroad Retirement beneficiaries must have applied by Wednesday, April 22nd. However, on August 14th, the IRS announced that it has extended this deadline to September 30th for households that didn’t receive the $500 payments for their children earlier this year. Qualifying households are households who:
- Receive Social Security retirement, survivors, or disability benefits, SSI payments, VA Compensation or Pension benefits, or Railroad Retirement benefits;
- Did not file a 2019 or 2018 tax return;
- Have a qualifying child under age 17; and
- Did not already enter information in the IRS’ Non-Filer Tool for themselves and at least one child.
Qualifying households should use the IRS’ Non-Filer Tool to apply. If an individual had already entered their information in the Non-Filer Tool before the earlier deadlines listed above, or even if entered after the earlier deadlines, the individual does not have to take any further action. The IRS will automatically make a payment by mid-October based on the information provided.
CHECK THE STATUS OF PAYMENT
To check the status of your payment, visit: https://www.irs.gov/refunds.
The IRS will mail a letter about the payment to the recipient’s last known address within 15 days after the payment is made. The letter will provide information on how the payment was made and how to report any failure to receive the payment.
TO UPDATE INFORMATION TO THE IRS
To update the IRS with bank account information, use the Get My Payment application, see above.
To update mailing address when a household has moved since they last filed, visit https://www.irs.gov/taxtopics/tc157.
How Payments are Received
WHEN THE IRS HAS THE INDIVIDUAL’S BANK ACCOUNT INFORMATION
If the IRS has the individual’s bank account information, it will transfer the money via direct deposit.
The first payments were deposited on April 14th to eligible taxpayers and will continue to roll out the direct deposit payments over the coming weeks.
IRS DOES NOT HAVE INDIVIDUAL’S BANK ACCOUNT INFORMATION
The IRS has established a web-based portal, Get My Payment Application, that allows individuals to provide their banking information to the IRS online, so individuals can receive payments by direct deposit as opposed to checks in the mail.
Visit: https://www.irs.gov/coronavirus/economic-impact-payments for the application.
INDIVIDUAL DOES NOT BANK
Individuals will receive check(s) by mail. Receipt of checks could take as long as 20 weeks. The IRS is prioritizing low-income households.
For additional information visit: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know.
For a FAQ, visit: https://www.irs.gov/coronavirus/economic-impact-payment-information-center.
Center for Independence of the Disabled
Assistance in determining eligibility and receiving benefits.