You might have some questions about the second federal stimulus payment.
The status of the new stimulus package has been up in the air for quite some time, but has now been signed into law. Still, the details may change and we’ll try to keep you updated.
You may be wondering:
♦ Do I qualify for a stimulus payment?
♦ When will my stimulus payment arrive?
♦ How much will my stimulus payment be?
♦ What if I don’t have direct deposit set up?
We have some answers.
Please note that we are not accountants, and we’re just curating info that is publicly available and trying to make it easier to understand.
We are not able to answer questions that are specific to your individual circumstances.
Who is eligible for stimulus money?
Not everyone will get a payment through the stimulus package, although it is likely that you will.
The payment is NOT linked to your employment status.
You can be eligible for a stimulus payment whether you’re employed full time, part time, self-employed, unemployed, or retired.
This is not an unemployment benefit. It is essentially an income tax credit, or rebate.
To qualify, you must have a Social Security number.
You cannot be claimed as a dependent on someone else’s tax return.
How much stimulus money will you receive?
The full payment this time is $600 a person, which is half of the amount of the first stimulus check that you may have received last spring.
How much money you qualify for is determined by your adjusted gross income (AGI) from your 2019 tax return.
To receive the full stimulus payment amount of $600, your AGI must not exceed these limits, according to your tax filing status:
- Single filer, married filing separately, or as a qualified widow: your AGI must be less than $75,000.
- Head-of-Household: your AGI must be less than $112,500.
- Married filing jointly: your AGI must be less than $150,000.
If your AGI is above the amounts listed above, you’ll receive a reduced amount.
Parents will also receive an additional $600 payment for each child under the age of 17.
Kiplinger has a handy second stimulus check calculator you can use to help you figure out how much you may get from your stimulus check.
Note that there has been some talk about increasing the amount from $600 to $2000. But Congress is divided on this issue, and political analysts don’t expect it to happen. If the higher amount is approved, the IRS will issue the difference in a separate set of payments.
What should you do to get your stimulus payment?
The IRS says the money will be distributed automatically, with no action required for most people. It will use info from your 2019 tax return to calculate your stimulus payment.
Then, the IRS will automatically get your money to you, in the form of a mailed check or a direct deposit into the bank account you have on file with the IRS.
How and when do stimulus payments arrive?
The direct deposits started going out around December 29, 2020. Many people have already found the extra money in their bank accounts.
Note that if you receive your payment early on, your bank may mark the payment as “Pending” or “Provisional” until Jan. 4th, which is when the IRS actually releases the funds. Some banks, however, are making the funds available right away to customers in good standing.
Checks are obviously a bit slower than direct deposit.
Still, if you are expecting a paper check, it will likely arrive quickly. That’s because the IRS is on a tight schedule with these stimulus payments — the stimulus bill mandates a cutoff date of January 15, 2021 for getting out all the payments.
Also, the IRS said it will make some payments using an Economic Impact Payment prepaid debit card.
So, even if you received a paper check last time, you might get a debit card this time.
The cards and checks will arrive in an envelope with the U.S. Treasury Department seal on it.
Here’s an article that suggests two possible ways to track your stimulus payment.
Why is the Jan. 15th cutoff date important?
After January 15th, the IRS must stop sending payments. It remains to be seen whether they can issue millions of stimulus checks, direct deposits, and prepaid debit cards by then.
If you do NOT receive your stimulus payment by Jan. 15th, you will need to claim it when you file your 2020 tax return (the one that’s due by April 15th, 2021). This the known as the Recovery Rebate Credit.
Depending on your circumstances, you may also be able to claim any money you didn’t receive, but are eligible to receive, from the first round of stimulus payments, which were made in spring of 2020.
If you receive your stimulus money through direct deposit, you’re far less likely to need the Recovery Rebate Credit. But if you don’t receive a paper check shortly after the cutoff date, you may face a lengthy delay — because the stimulus money will then be tied to your next tax return.
So, essentially, the stimulus payments going out now are actually advances on the Recovery Rebate Credit.
Read the official information from the IRS about the Recovery Rebate Credit, and please consult a tax professional with any questions.
Will I be taxed on the stimulus payment?
The stimulus payment is not taxable income. You will not owe taxes on this money.
Also, a stimulus check is separate from your tax refund. If you’re due a tax refund, you will still get that if you file your return.
We found this article from Kiplinger simple and easy to understand.
Beware of stimulus check scams
Any situation can bring about a scam, so beware of suspicious communication from anyone claiming to be involved with processing stimulus checks.
The federal government will not call or email you or reach out via social media. Any outreach like this is likely a scam, so don’t reply, share any personal information or send money.
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- Garden Lights, Holiday Nights at the Atlanta Botanical Garden
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