USA: What to know about the Economic Impact Payments

April 13, 2020
DUNIA Mag
Posted in Around The World

In March, the U.S. government passed the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act “to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic”.

The economic relief package which is to the tune of around $2 trillion dollars will be delivered to American taxpayers and businesses.

How much can taxpayers expect to receive? The Internal Revenue Service (IRS) has stated that:

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:
$75,000 for individuals, $112,500 for head of household filers and $150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their AGI is between:
– $75,000 and $99,000 if their filing status was single or married filing separately
– 112,500 and $136,500 for head of household
– $150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

How will taxpayers receive their relief payment?

Most taxpayers do not need to take action in order to receive their Economic Impact Payment (EIP).

Taxpayers who have already filed a 2018 or 2019 tax return that included direct deposit information will automatically receive their Economic Impact Payment (EIP) via direct deposit into the account. Taxpayers who did not include direct deposit information on their 2018 or 2019 tax return will receive their Economic Impact Payment (EIP) by mail at the home address entered in the return.

Taxpayers who filed their 2018 or 2019 tax return that included a bank product will receive their Economic Impact Payment (EIP) via direct deposit into their bank account if they included their direct deposit information on the bank application. If the taxpayer selected paper check on the bank application, their Economic Impact Payment (EIP) will be mailed to the home address entered in the return.

Social Security recipients who are not otherwise required to file a return will not need to file a simple return in order to receive their Economic Impact Payments (EIP). They will receive their payments automatically. (https://home.treasury.gov/news/press-releases/sm967)

Reported today:

The IRS has begun depositing Economic Impact Payments into the accounts of taxpayers who filed a 2018 or 2019 tax return with direct deposit information included in the return. This includes taxpayers who applied for a bank product and selected the direct deposit option on their bank application.

Later this week, taxpayers will be able to check the status of their payment, change their address and change their direct deposit information by using the IRS Get My Payment application which is anticipated to be live on the IRS website by April 17th.

The IRS will be sending letters to all taxpayers who receive an Economic Impact Payment providing information on how the payment was made and how to report any failure to receive the payment. These letters will be mailed to the taxpayer’s last known address.

Taxpayers are advised to use the IRS Get My Payment application to update any necessary information and check the status of their payments.

Haven’t filed a tax return?
Taxpayers who are not typically required to file a tax return can now file a simple return electronically. A simple return is a return with filing status single or married filing joint and $0 income. Filing a simple return for taxpayers will allow household and direct deposit information to be filed with the IRS. The IRS will use the information from the simple return to direct deposit or mail an Economic Impact Payment (EIP) to these taxpayers.

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