On Friday March 27, 2020 the President signed the $2 trillion CARES Act, H.R. 748. One of its many significant provisions is the distribution of economic impact payments also known as stimulus checks.
Many Americans will receive this one-time payment to help alleviate financial struggle and to help stimulate the economy. Individuals will receive up to $1,200 and joint-filers will receive up to $2,400. An additional $500 will be provided for each child under 17 years of age. The amount received, if any, is dependent on several factors including but not limited to your 2018 (or 2019) tax return as well as your Adjusted Gross Income (AGI). The amount received will be reduced if your AGI is above $75,000 (or $150,000 for joint filers).
Over the last few weeks, there have been many myths floating around about stimulus checks. Here are the truths.
- If you qualify and receive a stimulus check, the check is all yours! It is not a loan and you will not need to pay it back.
- If you qualify and receive an Economic Impact Payment, it will not be included in your taxable income.
- The stimulus check is not part of your gross income and therefore, you will not owe money based on your stimulus check on a future tax return.
- You still need to pay your taxes as you normally are expected to. For some people, this may mean using their stimulus check to help pay their taxes.
- If you expect to receive a tax refund, the stimulus check will not reduce your refund amount.
For more questions regarding stimulus checks, visit the IRS Economic Impact Payment Information Center.Economic Impact Payment Information Center