As a result of the social and economic impact of COVID-19 on the United States, the Coronavirus Aid, Relief, and Economic Security Act (CARES) has been created to support the American people. CARES will be providing a stimulus package for all citizens.
The stimulus package provides a one-time payment for every household in the country. The check will include $1,200 per adult and $500 per child under the age of 17. Although this stimulus aims to support the majority of Americans, there are some restrictions. If you individually make more than $75,000, your payment amount will decrease by $5 for every $100 you are over that cap. Individuals making more than $99,000 and couples making more than $198,000 do not qualify for the stimulus package. These amounts are based on your 2019 taxes. If you have not filed your taxes yet, your previous tax returns will be referenced.
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The Treasury plans to begin disbursements within weeks of signing the package into law.
“Our expectation is within three weeks we will have direct payments out where we have depository information,” Treasury Secretary Steven Mnuchin previously stated. “We’re looking to get a lot more information, and we have procedures to do that.”
Seniors and young adults that are listed as dependents on someone else’s tax forms will not receive individual checks. Each household will receive one check, either directly deposited into their bank account or mailed, that includes all of their claimed dependents. Currently, there is no set day for approval or disbursement.
For many seniors reliant on these government funds, this stimulus package will provide much relief to their daily finances. This money is not a loan and will not be taxed later on. However, it could affect your future tax refund. The economic stimulus is considered an advance payment of your tax credit for 2020. Although not confirmed, this could cause you to receive less money when filing next year.
With so many changes happening this tax season, it’s important to consult with an experienced CPA. You can review your current tax documents, ask additional questions about the CARES stimulus package, and get a better understanding of your current finances.
If you have tax-related questions or need financial guidance, contact us at 951-686-3608 to find out how we can help.