On March 25th, 2020 congress passed a federal stimulus package named Coronavirus Aid, Relief, and Economic Security Act (CARES Act), worth $2.2 trillion.
The bill has also been signed into law by Donald Trump. This bill will provide some relief to millions of Americans, in the form of a stimulus check/deposit in the amount of $1,200 for most. Americnas living overseas are eligible for this amount. Here are some of the questions that the Americans are asking about this bill:
What is the eligibility criteria to receive the federal stimulus check?
The bill is going to apply if you have US citizenship or if you are considered a permanent resident, such as green card holders. You are still going to get this if you qualify based on the requirements just because you are a citizen. Anyone who filed a form 1040 with a Social Security Number.
This excludes Non-Resident Alien (filing form 1040NR) as well as those filing with an ITIN.
Another requirement for the stimulus checks is the threshold of annual income as given below:
|Status||Adjusted gross income *|
|Single||$75,000 to $99,000|
|Married couple filing joint returns||$150,000 to $198,000|
|Head of household||$112,550 to $146,500|
Here the adjusted gross income is your total income less the allowed deductions such as interest on student loans, contributions of health saving accounts or educator expenses etc.
How much will I receive and are my Medicare benefits being affected?
What will you receive depends on how much you earn and whether you are married or not! An analysis by CNBC says 90 percent of Americans will receive a federal stimulus check for $1,200 or $2,400 for married couples.
As far as your Medicare benefits are concerned, the bill is far-reaching. Anyone with a Social Security number who is not a dependent being claimed on someone else’s tax return will qualify for a check. He/she will qualify within the income limits and here’s how it works:
The bill states that individuals with an adjusted gross income of $75,000 or less per year will receive a $1,200 check. Married couples who earn less than $150,000 per year will receive one stimulus check at $2400. If you claim any dependents under the age of 17, you will receive a $500 check per dependent. The benefit amount will phase out by $5 with every increase in $100 from the lower threshold. For instance, if a single person’s annual income is $80,000, he will receive = ($1,200 – [(5,000/100) x5]) = $950
How does the IRS assess whether I qualify for the federal stimulus check or not?
The federal government or IRS will review your income tax return for 2019 (due date of filing is 15th April, 2020) to assess your eligibility for the stimulus check. I you have not filed that return yet, they will base their eligibility criteria of stimulus check on your 2018 income returns.
When and how will I receive my federal stimulus check?
Checks will go out in April 2020. However, you will not receive a check if you are an individual earning more than $99,000. You will not get a checkif you’re a married couple filing jointly and earning more than $198,000 per annum. If the IRS has your direct deposit account information from a recent tax return, your check will be deposited into that bank account. However, if they don’t have that information then you will likely receive a check in the mail. It will be about 3 to 4 weeks before checks begin being deposited.
What if my federal stimulus checks money never arrives?
If you don’t get a check or get less than you thought, you can make a claim on your 2021 tax return. You can call the IRS and get their feedback on it.
Importantly, these stimulus checks are not a gift or free money from the government. This is an interest-free advance credit from the IRS. You will have to settle it back in the future and certainly, through your income tax returns of 2020.