As part of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) - the recently approved $2.2 trillion stimulus bill - $1,200+ stimulus checks will be sent to every individual and household in America. That’s great...but how much is it? When and how do you get it? And what’s the catch? We answer all this and more by combing through the CARES Act Section B Section 2101 and the IRS website.

Breaking News: Track the status of your IRS stimulus check payment. In addition, the IRS just updated their page to allow non-filers to submit payment information for receiving the COVID stimulus check. The web portal for filers to submit payment information to receive the check will be out in mid April. In addition, according to a recent tweet by the IRS on April 11th, $1,200+ stimulus money is starting to arrive in bank accounts. Many of our customers are receiving the stimulus money in their bank accounts!

The “2020 recovery rebate” or COVID $1,200+ stimulus checks

The CARES Act includes about $300 billion of payments to the average American person. The official name for these payments is “2020 recovery rebates” based on Section 2101 of the CARES Act. This recovery rebate comes at an important time as folks are losing jobs and feeling financial hardship due to the coronavirus pandemic in the US. Here at Possible, we’ve seen firsthand how coronavirus (COVID-19) has affected people’s jobs, income, and economic stability for the worse.

The coronavirus pandemic has seen cases grow like wildfire in many states in the US and unemployment is rising quickly. A recent Washington Post article mentions unemployment rates could go to almost 25% with 20 million and more Americans without a job - numbers not seen since the Great Depression. Therefore, the federal government wants to get money into the hands of average Americans as quickly as possible. Why not even more money you ask? We’re not sure ourselves but there’s already discussions of another follow-on stimulus perhaps in the future.

How much is the COVID-19 stimulus check?

Here’s how much folks will receive:

• Individual tax filers receive $1,200

• Married couples filing jointly receive $2,400

• $500 additional for each child

Seems simple enough right? Yes, but there are limitations. Due to these limitations, about 93% of Americans, not all, will receive some money as coronavirus relief.

Income and other limitations for the $1,200+ stimulus check

Below are the income limitations for the $1,200 and $2,400 stimulus check:

• Individual tax filers with adjusted gross income (AGI) up to $75,000 will receive $1,200. The stimulus check amount is reduced by $5 for each $100 above the $75,000 in AGI and completely phases out at $99,000.

• Joint tax filers with adjusted gross income (AGI) up to $150,000 will receive $2,400. The stimulus check amount is reduced by $5 for each $100 above the $150,000 in AGI and completely phases out at $198,000.

• Heads of households with adjusted gross income (AGI) up to $112,500 will receive $1,200. The stimulus check amount is reduced by $5 for each $100 above the $112,500 and completely phases out at $136,500.

Note: You can find your adjusted gross income (AGI), sometimes referred to as “gross income” on your IRS Form 1040 - it includes wages, alimony, capital gains, business income, etc. minus certain payments such as student loan payments or contributions to a traditional IRA or health savings account.

Example: Bob is married to Sally and they have one kid who is 8 years old. Bob and Sally file a joint tax return as a married couple. Bob and Sally’s combined adjusted gross income (AGI) on their 2019 tax return is $160,000. Bob and Sally will receive ($2,400 minus $500 (reduction for high income earners) plus $500 (one dependent child under 17 years old) = $2,400 stimulus check.

Are you a parent? Lucky you (or maybe not in other ways)! You’ll receive $500 additional per dependent child under the age of 17, with no adjusted gross income (AGI) limitations. If you’re not sure whether your child’s age qualifies you for the additional $500, lean on the definitions of the Child Tax Credit.

So who doesn’t qualify for the $1,200+ stimulus check?

• Non-resident aliens. A commonly used IRS term, it’s basically someone who is not a US Citizen or US National who has not passed the green card test or substantial presence test. In the case where you are a Non-resident alien and your spouse is a US alien resident and you file married jointly under your spouse, you will be considered a US alien resident for tax purposes.

• A dependent on someone else’s tax return. If someone else claims you as a dependent on their tax return, you will not qualify for the stimulus check. That means many elderly, disabled adults, and students 17 and over will not get a stimulus check.

• Those who don’t have a Social Security Number (SSN) or a Tax ID Number (TIN). With a few exceptions for members of the military, everyone must have a valid SSN or TIN to receive the stimulus check.

When will the COVID-19 stimulus check money arrive?

The latest IRS information (updated as of April 1, 2020) states that distribution of economic impact payments (ie. stimulus checks) will begin in the next 3 weeks with no action required for most people. On April 11th, the IRS tweeted that stimulus money is starting to arrive in bank accounts for some folks and those lucky enough to have received them have also confirmed it. However, there’s no actual schedule or guarantee your check will arrive the first week after they begin and worst-case scenarios show it could arrive as late as a few months from now. You can track the status of your stimulus payment on the IRS website.

Recently, the House Ways and Means Committee released a memo, detailing that the stimulus check distribution may work like the below:

• Week of April 13th - 60 million payments are distributed via direct deposit

• Week of May 4th - paper stimulus checks are starting to be distributed by mail

• Each week thereafter - 5 million more paper stimulus checks distributed by mail each week

As you can see with the stimulus check distribution schedule, the money may take more time than expected to arrive during or potentially even after the pandemic. If you haven’t yet filed your 2019 tax return and you expect to receive a refund or pay a small amount, it might be beneficial to file it as soon as possible and make sure you have the latest direct deposit information on that tax return. The difference between receiving a stimulus payment in mid-April versus mid-May or even June is drastic!

Common questions on the COVID-19 stimulus check

I typically don’t file tax returns. Will I receive money from this stimulus bill?

Yes, the Internal Revenue Service (IRS) will use information from Form SSA-1099 and Form RRB-1099 to generate the stimulus payments for those that weren't required to file or did not file a 2018 or 2019 tax return. This includes senior citizens, Social Security recipients, railroad retirees, and others. Since there is no information regarding dependents for these types of filers, each person will receive the base $1,200 stimulus check.

Recently, the IRS partnered with freefilefillableforms.com to provide an online portal for those who don't file tax returns to enter their payment information to receive the stimulus check. You should submit your information if you:

• Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019

• Were not otherwise required to file a federal income tax return for 2019, and didn't plan to

Access additional information for non-filers and the portal to submit your payment information directly on the IRS website.

What tax return will be used to calculate my adjusted gross income (AGI)?

The IRS will use your 2018 AGI to calculate the stimulus payment amount unless you have filed your 2019 tax return. If you have filed your 2019 tax return, the IRS will use the AGI on your 2019 tax return.

Does the stimulus check have to be repaid and is it taxable?

No, the stimulus check is considered a tax credit and does not need to be repaid. You will not be taxed on the stimulus check either.

What if the IRS doesn’t have my latest direct deposit information?

The IRS will be using the direct deposit information on your latest tax return, whether 2018 or 2019, to send you the stimulus check payment. Can’t remember which account that is? Pull out Form 8888 on your 2018 or 2019 tax return to take a look. If you’ve already filed a 2019 tax return and didn’t include direct deposit information, look out for the upcoming IRS online portal coming out mid April. The IRS is creating an online web portal for folks who don’t have direct deposit information with the IRS to submit direct deposit information so they can get the stimulus check sooner. If you’ve missed both adding info to the portal and adding direct deposit to your tax returns, you’re unfortunately left with waiting for the stimulus check through the mail. Although you may receive it 1-2 months later than folks on direct deposit, some money is better than none at all.

My address has changed. How do I make sure I receive my check?

We recommend you file an address change with USPS and relevant mail providers as soon as possible. That way, even if the IRS sends the stimulus check to the old address on your tax return, the mail can be re-routed to you. In addition, you can update your address information with the IRS using Topic #157 Change Your Address and How to Notify the IRS.

What if I owe back taxes and child support?

Even if you owe back taxes, you’ll still qualify for the $1,200+ stimulus check. However, if you owe child support, your stimulus check will shrink or go away altogether according to a recent NBC News article.

Can I qualify if my 2020 adjusted gross income (AGI) is low but my 2019 AGI is high?

Yes, although you won’t get the stimulus check right now. Since the $1,200 and more stimulus check is a 2020 tax credit, you will be able to claim it as a tax credit when you do your 2020 tax return. Therefore, if your AGI in 2020 is substantially lower and puts you below the income limitations, you can qualify!

How to protect yourself against COVID-19 stimulus check scams

First, know the facts about the stimulus check:

1. The Federal Trade Commission (FTC) says that no one from the government will call or email and ask for your social security number (SSN), bank account number or credit card number. They do not need your birth date either.

2. The Federal Deposit Insurance Corporation sent out a similar warning, saying it will not contact customers asking for account numbers and other personal data

3. There are no fees for getting the stimulus check from the government

Here are some best practices on protecting yourself from scams:

• Keep sensitive personal and financial data private

• Be skeptical about calls and emails, especially from people you don't know. Phone numbers can be spoofed so that it looks as if a government agency is calling you. Government email addresses can end in .gov but are not actually the correct email addresses

• Contact the agency (such as the IRS) directly by going to the official website

• Check reputable news outlets such as CNN and others and follow the advice of the FTC coronavirus scams page

Other COVID-19 financial support and help

Check out our comprehensive resource list for coronavirus (COVID-19) financial support and assistance. We have a state-by-state breakdown of financial resources you can access along with solutions for a variety of situations including income/job loss, deferring payments, student loans, and more.
Lastly, if you’re looking for an installment loan that builds credit history, apply for a Possible loan. Borrow up to $500 in minutes, repay over multiple months, and build positive credit history. A loan from Possible Financemight be exactly what you need to make the ends meet during these difficult financial times, at least until government help arrives.