COVID-19 has been battering the U.S. economy for well over a month, and millions of Americans are suffering because of it. Thankfully, there's some relief available in the form of a stimulus payment that was approved as part of the $2 trillion CARES Act. But there's still a lot of confusion about how those stimulus payments work, so if you're in the dark, here are answers to some of the questions you may have.
1. When will I get my money?
An estimated 80 million Americans may have already received their stimulus cash, as payments started hitting accounts last week. If the IRS has bank account information for you on record because you signed for direct deposit on a recent refund, or you registered your bank account's information with the IRS, then you should see that money hit your account in the coming weeks.
Otherwise, if you're getting a check in the mail, prepare for delays. Paper checks are already going out this week, but at 5 million per week, it could take up to five months for all recipients to get their cash.
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2. Why didn't I get my full $1,200?
Though many Americans will receive $1,200 in stimulus cash, your payment will be lower if your recent income exceeded a certain threshold. Specifically, your eligibility is based on the adjusted gross income (AGI) you listed on your most recently filed tax return. If you submitted your 2019 taxes already, that's the data that will be used to determine your eligibility. If not, your 2018 AGI will be factored in.
If you're a single tax filer with an AGI of $75,000 or less, you'll get your $1,200 stimulus payment in full. But from there, that payment is reduced by $5 for each $100 that your income exceeds that threshold, so that if your last reported AGI was $85,000, you'll lose $500 in stimulus cash, leaving you with just $700 (assuming you have no children).
Meanwhile, anyone with a head of household filing status and an AGI of $112,500 or less will receive a full stimulus. The same holds true for married couples filing jointly with an AGI of $150,000 or less. But once these limits are exceeded, stimulus money gets taken away.
3. Why was my payment greater than $1,200?
If you have children in your household under the age of 17, you're entitled to an extra $500 for each one. As such, you may have received more than $1,200 as a single adult or more than $2,400 as a married couple.
4. Will my stimulus payment get taxed?
The short answer? No. The purpose of that stimulus check is to provide instant relief to struggling Americans and pump money back into the economy immediately. As such, if you're entitled to a full $1,200 based on your earnings, you'll get to keep that $1,200 in full.
5. Will I have to repay my stimulus?
Again, no. You may have heard that your stimulus check is an advance refund for a 2020 tax credit. Normally, you capitalize on a tax credit when you file that year's return, so that you'd snag a 2020 tax credit in 2021. But since so many people are cash-strapped now, that credit is being given out in stimulus form rather than making people wait.
6. Can my stimulus payment be garnished?
First, the good news: The IRS won't garnish your stimulus if you're behind on tax payments. But if you owe money in child support, you may have that payment garnished. The same holds true if you owe money to debt collectors who have obtained a judgment against you in a court of law.
7. Will I get a stimulus payment if I didn't file a recent tax return?
If you didn't file a tax return in 2018 or 2019, you should use the IRS's new tool to register for your stimulus payment. Keep in mind that if you're on Social Security but didn't file taxes for 2018 or 2019, you don't need to register. The same holds true if you didn't file a recent tax return and are receiving Veterans Affairs benefits. That said, if you fall into one of these groups and have qualifying children under the age of 17 in your household, you should register to make sure that you get the extra $500 per child you may be entitled to.
Hopefully, these answers have cleared up some of the questions you might have about your stimulus check. At a time like this, a little clarity could go a long way.
