The United States Government has passed several measures to provide relief for U.S. Taxpayers. Some of practical measures include the extension of the filing deadline for many Income Tax Returns until July 15, 2020. Payments of taxes due on those returns have also been extended until July 15, 2020.
Additionally, many U.S. Taxpayers are eligible for payment of an “Economic Impact Payment” of $1,200 per person (and $500 per qualifying child). While the rules related to eligibility are somewhat complex the basic eligibility requires the following:
- Taxpayer must be a U.S. Citizen, Permanent Resident or qualifying Resident Alien (with Social Security Number valid for Employment).
- Taxpayers must have either filed a 2018 or 2019 tax return and cannot have been a dependent of another.
- AGI on the respective tax return must be less than $75,000 (if filing as Single or Married Filing Separately), $112,500 (if filing as Head of Household) or $150,000 (if filing a joint return) to receive the full $1,200 per person (plus $500 per qualifying child) payment.
- Taxpayers having an AGI higher than the above thresholds but less than $99,000 (Single, MFS), $136,500 (HoH), or $198,000 (MFJ), will receive a reduced payment.
The rollout of these payments has been a bit complicated because “automatic” payments are made into bank accounts that are on file with the U.S. Treasury. This means that if you have entered bank account information into an electronically filed Tax Return in recent years (by having made payments from, or received refunds into, a bank account) then the Treasury will directly deposit money into that account on your behalf. If you have not used direct debit or deposit and have received checks in the past, you may be able to input your bank account information through the IRS Web-Site.
Unfortunately, there have been a number of complications that may result in paper checks having to be mailed. According to news reports, these are significantly delayed so that the Impact Payment may arrive too late to be of immediate benefit.
One such case was a client who had last had to make a payment several years ago and had since closed that bank account. The IRS attempted to deposit the payment into that account and it was rejected. The client was not given the opportunity to update his information and instead now has to wait for a paper check to be issued, possibly months from now.
You will find a comprehensive resources on the IRS Webpages:
https://www.irs.gov/coronavirus/economic-impact-payment-information-center
https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions
