March 31, 2020 Update: CARES Act – Recovery Rebates to Assist Individuals & Families

Beth Misak |
Categories

The CARES Act, signed last week, could soon put cash directly into your pocket. The U.S. Treasury will send up to $1,200 per adult and $500 per child under the age of 17. For example, a married couple with two kids could get $3,400. So, should you be on the lookout for a check from Uncle Sam?

Here’s who qualifies for a payment: All U.S. residents who are not a dependent of another taxpayer and who have a work-eligible social security number are eligible, with limits based on annual income. This is true even for those who have no income, as well as those whose income comes entirely from benefits programs such as social security.


Recovery Rebate Payment Summary:

*Income is adjusted gross income from 2018 tax return, or 2019 if already filed
**Phaseout is raised by $10,000 per child
***Additional payment of $500 per child under age 17 – even if you don’t qualify due to income

Here’s who doesn’t qualify: Nonresident aliens, those without a valid social security number (or adoption taxpayer ID), or if you are claimed as a dependent on someone else’s tax return.

Don’t call the IRS! If you qualify, there’s no action you need to take. Just wait for your check to arrive. In addition to personal checks in the mail, the Treasury will also use direct deposit if the information is available on your tax return. The Treasury has promised to get the money to you as rapidly as possible—exactly when is hard to know. The Treasury currently says to expect it in about three weeks for direct deposit, longer for checks in the mail.

Beware of scam artists who promise to help you get your rebate. They’re just phishing for personal information that they can use to steal money from you. You should also know:

  • If you owe back taxes, you’ll still get money if you qualify.
     
  • If you don’t typically file a tax return, you’re still eligible. Check the IRS website for instructions.
     
  • If you don’t qualify due to your income, you won’t get a check, but you might still qualify for a tax credit later instead. More details aren’t available at this time.
     
  • Eligible tax filers should get a letter from the Treasury within 15 days of disbursement, detailing when and how much they’ve sent.

The money isn’t taxable. So, thankfully, every dollar is yours to use as you see fit. Let us know if you have any questions about this or anything else. We’re here to help you. We will get through this together.

Paul Hynes, CFP®
President and CEO
 


Sources:
https://www.irs.gov/coronavirus
https://honemaxwell.com/coronavirus-aid-relief-and-economic-security-act-cares-act/