The United States Treasury Department and the Internal Revenue Service has released figures for Economic Impact Payments, with 89.5 million individuals receiving payments worth nearly $160 billion in the program’s first three weeks. Another projected 150 million payments will be sent out and even those who typically do not file a tax return will also be eligible for these payments. Here is every detail you nedd to know on economic impact payment in USA.
Who is eligible for receiving Economic Impact Payments in USA?
Only U.S. citizens and U.S. resident aliens are eligible to receive the Economic Impact Payment of $1,200 for individual or head of household (HOH) filers, and $2,400 for married filing jointly(MFJ) if they are not a dependent of another taxpayer and have a valid Social Security number with adjusted gross income up to:
- $75,000 for individuals if their filing status was single or married filing separately(MFS)
- $112,500 for HOH filers and
- $150,000 for MFJ returns
Over and above economic payments, they are also eligible for an additional $500 per qualifying child. For eligible taxpayers who filed tax returns for 2019 or 2018, they receive the payments automatically and no further action needs to be taken by them.
Eligible retirees and recipients of Social Security retirement, Railroad Retirement benefits, survivor or disability benefits (SSDI), Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) will too receive economic impact payments. While some of these groups receive Forms 1099, many in this group don’t typically file tax returns, which totally works for the IRS in order for them to issue payments to such groups. Many people in these groups are expected to see the automatic $1,200 payments later in the month of April, with SSI and VA payments expected to start in May.
For people who have little or no income and didn’t file a tax return for 2018 or 2019 or don’t receive any of the federal benefits listed above, they too are eligible for an Economic Impact Payment in USA. They simply need to register with the Non-Filer tool( link given below) as soon as possible so they can start receiving a payment.
Who is not eligible for Economic Impact Payment in USA?
Most filers are likely to qualify for an Economic Impact Payment, with the exception of high-income filers.
Taxpayers are most likely not to qualify for an Economic Impact Payment if any of the following apply:
- If the adjusted gross income is greater than:
- $99,000 if your filing status was single or married filing separately(MFS)
- $136,500 for head of household(HOH) filers
- $198,000 if your filing status was married filing jointly(MFJ)
- An individual is claimed as a dependent on someone else’s return. For example, in a scenario when a child, student or older dependent is claimed on a parent’s return.
- He or she does not possess a valid, working Social Security number.
- He or she is a nonresident alien.
- He or she filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.
How much is it worth?
Eligible individuals with adjusted gross income up to $75,000 for single filers or married filing separately (MFS), $112,500 for head of household (HOH) filers and $150,000 for married filing jointly (MFJ) are eligible for the full $1,200 for individuals and $2,400 married filing jointly.
For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children are not eligible and will not receive payments.
For VA and SSI recipients who have a qualifying child (and didn’t file a 2018 or 2019 tax return) have a limited window to register to get paid $500 for an eligible child over and above their $1,200 check. By visiting the special Non-Filers tool on IRS.gov by Tuesday, May 5 for these groups may help put all of their eligible Economic Income Payment into one single lumpsum payment.
For SSA/RRB beneficiaries who don’t normally file a tax return and have a child but did not register on the IRS Non-Filers tool by April 22, they still are receiving their automatic $1,200 starting this week. Given the deadline has passed, by law, the additional $500 per eligible child amount would be paid in association with filing a tax return for 2020. This group can no longer use the Non-Filers tool to add eligible children.
Payments are being made either as a direct deposit or sent out as checks via mail.
The IRS tool to check status of your payments is as follows:
GavTax Advisory Services accepts clients from all 50 States including the State of New York, California, Texas,Illinois, Florida, Pennsylvania, Ohio, New Jersey, Virginia, North Carolina and all U.S territories as well.