COVID-19 Stimulus Benefit to Individuals

Who and How Much?

Single. Individuals with AGIs up to $75,000 a year are eligible for the full $1,200 payment. The payment is reduced by $5 for every $100 in income above $75,000. The payment amount is entirely phased out at an AGI of $99,000.

MFJ. Married filing joint couples with AGIs up to $150,000 a year are eligible for a $2,400 payment. The payment is reduced by $5 for every $100 in income above $150,000. The payment amount is entirely phased out at an AGI of $198,000 (if the taxpayers have no dependent children). Married couples also will receive an additional $500 for every dependent child under 17 and are phased out of the payment at a slightly higher AGI.

HOH. Head of household filers with AGIs up $112,500 a year are eligible for the full $1,200 payment and an additional payment of $500 for each dependent child under age 17. The payment is reduced by $5 for every $100 in income above $112,500. Head of household taxpayers will also receive an additional $500 per dependent child under age 17. With no eligible children, a head of household filer is phased out at AGI of $137,000. With one eligible dependent child, a head of household filer is entirely phased out of the payment at AGI of $146,400.

What Needs to Be Done to Get the Stimulus Rebate?

Nothing. The IRS will deposit the calculated amount directly into the individual’s bank account, using the AGI and the bank information on the 2019 tax return. If the 2019 return hasn’t been filed, the IRS will use the AGI and the bank information on the 2018 tax return. If there’s no bank information on the return, the IRS will mail a check.

2020 Tax Return

Technically the stimulus rebate is a 2020 refundable tax credit. The payment received in the next few weeks is an IRS advance. Many clients will have less income in 2020 than in 2019 because of layoffs, reduced hours, and closed businesses. If the client’s payment was reduced by the AGI threshold in the calculation of the advance using the 2019 income, they’ll receive a credit on their 2020 return. If for some reason, they receive too much of an advanced payment, they do not have to pay the advance back on their 2020 return.

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