April 03, 2020 Update
For this week’s update, we wanted to share a summary view of the Economic Impact Payments and the CARE’s act and how you may benefit. The final law does cover both retirees and Self-Employed Independent Contractors as well as W-2 wage earners. As always, please feel free to call or write with any questions or concerns you may have.
Who is eligible for the Economic Impact Payment?
- Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
- For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.
- Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
- Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
- Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
How will the IRS know where to send my payment?
- The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
- For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment.
- The economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
- In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online. This will allow individuals to receive payments immediately as opposed to checks in the mail.
- This portal is still being created and we will be sure to let you know as soon as the portal is up and running and ready for you to submit your information.
I am not typically required to file a tax return. Can I still receive my payment?
- Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.
- Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.
I need to file a tax return. How long are the Economic Impact Payments Available?
- The Economic Impact Payments will be available through 12.31.2020.
I have a tax filing obligation but have not filed my tax returns for 2018 or 2019. Can I still receive and Economic Impact Payment?
- Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
Unemployment Insurance Provision for freelancers and contractors: Section 2101.2102
- This section creates a temporary Pandemic Unemployment Assistance program through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, those with limited work history, and others) who are unable to work as a direct result of the coronavirus public health emergency.
- Now, under the temporary assistance program, these nontraditional works will receive insurance checks and an additional $600 a week, for up to four months.
This is the direct link to the CARES Act 2020/Unemployment Insurance: https://www.finance.senate.gov/imo/media/doc/CARES%20Act%20Section-by-Section%20(Tax,%20Unemployment%20Insurance).pdf
Opinions expressed herein are those of their writers and are based on information believed to be accurate at the time. Danda Trouvé makes no warranties as to the continued accuracy of such information.
This information is not intended to offer tax advice. Please consult with your tax professional for details specific to your situation.