​​​​Stimulus Check – Economic Impact Payment

Last updated June 2, 2020

by Fit Money CPA, Louisville Ky

RESOURCES AVAILABLE TO INDIVIDUALS

Coronavirus Stimulus Check - Economic Impact Payment

This situation is evolving, and  information here is subject to change.


Am I eligible to receive a stimulus check, and if so, how much will I receive?

Based on your 2018 or 2019 tax return (whichever is on file): if you make up to $75,000 you will receive $1,200. Families making under $150,000 jointly will receive $2,400, plus an extra $500 per qualifying child.

For individuals whose AGI exceeds the above thresholds, the payment amount is phased out at the rate of $5 for each $100 of income. Thus, the payment is completely phased out for single filers with AGI over $99,000 and for joint filers with no children with AGI over $198,000. For a married couple with two children, the payment will be completely phased out if their AGI exceeds $218,000.

Social security recipients who do not file taxes will also receive a check.


When will I receive my stimulus check?

There is no concrete timeline for when the money will be received. For people who have filed tax returns that include direct deposit information, the payments will be made automatically. The IRS says“In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.”
Update: The portal is live! You can find out about your stimulus check from the IRS Economic Impact Payments portal.


Will I have to pay the stimulus money back?

Once you have the money from the stimulus check, it is yours to keep. Payments are nontaxable. Economic impact payments will not be included in the recipient's income for tax purposes. Some confusion exists: while this is technically classified as a tax credit advance on your 2020 tax return, this provision simply allows the government to to use the IRS system to send payments. This amount is credited on the 2020 tax return, as if you had already paid it back. 

How does the stimulus check affect my taxes?

There is no practical impact on your tax return.

Example: Suppose you expect (for 2020) to have $50,000 in income. That means you’d owe about $4,300 in taxes. If you paid extra each month and withheld a total of $5,300, you’d get a $1,000 tax refund on your tax return.

With the CARES Act, you receive an additional “credit” for $1,200 and your tax liability is lowered from $4,300 to $3,100. Now, you would expect a $2,200 refund ($5,300 paid minus the $3,100 owed). Instead of paying you $2,200 after taxes in 2021, the IRS is sending you a $1,200 check now, so your actual refund at tax time is still $1,000. Since this is essentially an early tax refund on taxes you will pay in 2020, you don’t have to pay it back and as Senator Dianne Feinstein’s office confirmed, it is not taxed.


Fit Money CPA provides tax, accounting, consulting and advisory services to a variety of businesses and individuals.  Please contact us (tax@fitmoneycpa.com) to see how we may be able to assist you.