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What the Stimulus Package Means to YOU
Grewal Law, PLLC
(888) 211-5798

Congress just passed a Stimulus Package to inject around $2 trillion into the U.S. economy.  As expected, the Stimulus contains a lot of complicated politics.  In order to help you understand what it means for you, your family, and your business, my colleague Tim Seeger and I will be presenting a number of articles designed to break down the politics, and outline exactly how the Stimulus effects you.  This article is specific to what the Stimulus means to you and your family.

How much money will I receive?

The amount you will be entitled to receive relies on three main factors: 1) whether you filed your taxes individually, head of household, or jointly; 2) your adjusted gross income (AGI); and, 3) how many children you have.  These factors are found in Subtitle B—Rebates and Other Individual Provisions of the Stimulus, which can be found, here.

Here’s how the amounts will be calculated:

    • If you filed individually and received less than $75,000, you will be eligible for $1,200.
    • If you filed Head of Household and received less than $112,500, you will be eligible for $1,200.
    • If your filed jointly and have a combined income less than $150,000, you will be eligible for $2,400.
    • Taxpayers with children would receive an additional $500 per child, on top of the above amounts.
    • If your income exceeded $75,000 (if filed single), $112,500 (if filed Head of Household), or $150,000 (if filed jointly), the amount of the payment will be phased out by 5% of the additional income. This means that your payment will decrease by $5 for every $100 over the threshold numbers.  (Find out more detailed information, here).
    • Taxpayers with income above $99,000 (individual), $136,500 (Head of Household), and $198,000 (joint) will be phased out completely, depending on the number of children you have. (Find out more detailed information, here).
    • If you had little or no income tax liability and received Social Security Benefits, you will still be eligible if you received a Form SSA-1099 or Form RRB-1099. This means you will qualify even if you did not file a 2018 or 2019 tax return.

How do I determine my income?

Your income will be based on your Adjusted Gross Income.  This can be found on your tax return. The Government will be determining your income based on your 2019 tax return (Line 8B on your Form 1040). If you haven’t yet filed your 2019 return, it will be based on 2018 tax return (Line 7 on your Form 1040).

When will I get the money?

The bill says that the money will be issued “as rapidly as possible.” Additionally, the Treasury Department is required under this bill to run a “public awareness campaign” which will give further information about the program.

How will I get the money?

While there is not an exact time frame, it is important to know how you will receive the money:

  • First, you do NOT need to sign up or fill out any forms to receive this money. Michigan’s Attorney General has already warned of scams – so keep this in mind and do not give out personal information, including your social security number, over the phone or online.
  • If you have received a tax refund in the last two years by direct deposit, your money will be deposited into that account.
  • If you have not used direct deposit in the last two years, a paper check will be sent to your last known address.
  • 15 days after payment has been sent to you, the IRS will send a letter to your last known address, indicating: 1)the method of your payment; 2) the amount you received; and 3) a phone number to contact the IRS if you did not receive your payment.

There are a lot of other factors that play into whether you qualify for the payments and exactly how much you can receive. Please visit our Grewal Law website for more information.

20 Comments

  1. Gravatar for Amna khan
    Amna khan

    Please also throw some light on kids between the ages of 18 and 24. Who are full time students. Living/not living at home. Adults but still file as dependents because of tuition fees and stuff.

    1. Daniel Barnett

      Thank you for reading my article. The Stimulus packages states to look at the Internal Revenue Code Section 24(c) for the definition of qualifying child. That section states: "the term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17." I am not a tax attorney, so you would need to consult one (or maybe a CPA) for a specific answer, but from what I'm reading, it does not seem like that would qualify. Hope this helps.

      Section 152(c) states:

      "Qualifying Child — For purposes of this section—

      I.R.C. § 152(c)(1) In General — The term “qualifying child” means, with respect to any taxpayer for any taxable year, an individual—

      I.R.C. § 152(c)(1)(A) — who bears a relationship to the taxpayer described in paragraph (2),

      I.R.C. § 152(c)(1)(B) — who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,

      I.R.C. § 152(c)(1)(C) — who meets the age requirements of paragraph (3),

      I.R.C. § 152(c)(1)(D) — who has not provided over one-half of such individual's own support for the calendar year in which the taxable year of the taxpayer begins, and

      I.R.C. § 152(c)(1)(E) — who has not filed a joint return (other than only for a claim of refund) with the individual's spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.

      I.R.C. § 152(c)(2) Relationship — For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if such individual is—

      I.R.C. § 152(c)(2)(A) — a child of the taxpayer or a descendant of such a child, or

      I.R.C. § 152(c)(2)(B) — a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative.

      I.R.C. § 152(c)(3) Age Requirements

      I.R.C. § 152(c)(3)(A) In General — For purposes of paragraph (1)(C), an individual meets the requirements of this paragraph if such individual is younger than the taxpayer claiming such individual as a qualifying child and—

      I.R.C. § 152(c)(3)(A)(i) — has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or

      I.R.C. § 152(c)(3)(A)(ii) — is a student who has not attained the age of 24 as of the close of such calendar year.

      I.R.C. § 152(c)(3)(B) Special Rule For Disabled — In the case of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during such calendar year, the requirements of subparagraph (A) shall be treated as met with respect to such individual.

      I.R.C. § 152(c)(4) Special Rule Relating To 2 Or More Who Can Claim The Same Qualifying Child

      I.R.C. § 152(c)(4)(A) In General — Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers for a taxable year beginning in the same calendar year, such individual shall be treated as the qualifying child of the taxpayer who is—

      I.R.C. § 152(c)(4)(A)(i) — a parent of the individual, or

      I.R.C. § 152(c)(4)(A)(ii) — if clause (i) does not apply, the taxpayer with the highest adjusted gross income for such taxable year.

      I.R.C. § 152(c)(4)(B) More Than 1 Parent Claiming Qualifying Child — If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—

      I.R.C. § 152(c)(4)(B)(i) — the parent with whom the child resided for the longest period of time during the taxable year, or

      I.R.C. § 152(c)(4)(B)(ii) — if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.

      I.R.C. § 152(c)(4)(C) No Parent Claiming Qualifying Child — If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual."

      1. Gravatar for Leisa E
        Leisa E

        I’ve heard several employers mention they aren’t going to pay employees and substitute this stimulus for payment for time off work during the virus? Any info on if and can they do this!

  2. Gravatar for Susan Cremer
    Susan Cremer

    Do we need to pay it back in the years to come? If so, how. Thank you

    1. Daniel Barnett

      Susan:

      Thank you for reading my article. To start off I want to say that my comments are to be taken generally only. I am not a tax attorney, so if you are looking for a tax-specific response, you should consult with an attorney that specializes in tax or a CPA. This response is also not intended to create an attorney/client relationship.

      Having said that, everything I have head and read is that you will not have to pay this back, and that it will not effect your 2020 return. This article from Forbes is helpful.

      https://www.forbes.com/sites/kellyphillipserb/2020/03/25/all-you-wanted-to-know-about-those-tax-stimulus-checks-but-were-afraid-to-ask/#30c482df1f9c

      It states:

      Okay, I don’t understand. What is a refundable tax credit? A refundable credit means that you can take advantage of the credit even if you do not owe any tax. Unlike with a nonrefundable credit, if you don't have any tax liability, the "extra" credit is not lost but is instead refunded to you.

      In this case, the stimulus check acts like a refund that you get in advance based on your 2020 income. That’s confusing because you don’t know how much you’re going to earn in 2020, but it’s why the IRS is using earlier returns. But this advance payment on the credit does not affect your “normal” tax refund for 2020: you won’t lose out on your expected tax refund for 2020 with the check.

      Hope this helps. If there are any CPAs out there, feel free to chime in.

  3. Gravatar for Dayla
    Dayla

    I would like to know if this is taxpayers money being used for the relief stimulus and if yes is it legal for the government to gave us pay taxes twice on the same money? Also, the American people need to know how this will effects their tax liability because if they end up oweing taxes then this stimulus would defeat the purpose of helping Americans because if you do end up owning due to this stimulus, than Americans will end up paying penalties and interest on the money owed if you can't pay what is owed at time of filing taxes next year.. Thank you.

  4. Gravatar for Dayla Brown
    Dayla Brown

    Any CPA'S out there who can answer this I would very much appreciate it. I would like to know if this is taxpayers money being used for the stimulus relief and if yes is it legal for the government to have Americans pay taxes twice on the same money? Also, the American people need to know how this will effect their tax liability because if they end up owing taxes, then this stimulus would defeat the purpose of helping Americans, because Americans may end up owing due to this stimulus, and if Americans can't afford to pay their tax bill at tax time due the stimulus relief, Americans will end up paying penalties and interest on the money owed if they can't pay what is owed at time of filing taxes next year.. Thank you.

    1. Daniel Barnett

      Dayla:

      Thank you for reading my article. To start off I want to say that my comments are to be taken generally only. I am not a tax attorney, so if you are looking for a tax-specific response, you should consult with an attorney that specializes in tax or a CPA. This response is not intended to create an attorney/client relationship.

      I would love a CPA to chime in as well. Having said that, everything I have head and read is that you will not have to pay this back, and that it will not effect your 2020 return. This article from Forbes is helpful.

      https://www.forbes.com/sites/kellyphillipserb/2020/03/25/all-you-wanted-to-know-about-those-tax-stimulus-checks-but-were-afraid-to-ask/#30c482df1f9c

      It states:

      Okay, I don’t understand. What is a refundable tax credit?

      A refundable credit means that you can take advantage of the credit even if you do not owe any tax. Unlike with a nonrefundable credit, if you don’t have any tax liability, the “extra” credit is not lost but is instead refunded to you.

      In this case, the stimulus check acts like a refund that you get in advance based on your 2020 income. That’s confusing because you don’t know how much you’re going to earn in 2020, but it’s why the IRS is using earlier returns. But this advance payment on the credit does not affect your “normal” tax refund for 2020: you won’t lose out on your expected tax refund for 2020 with the check.

  5. Gravatar for Nancy Beach
    Nancy Beach

    Hoping for some answers to unemployment benefits for my in home daycare in that I don’t have any parents working “essential” jobs. This is all so confusing!

  6. Gravatar for Misty Crawford
    Misty Crawford

    I am on ssa disability and I was claimed as a dependent in 2018 and filled single and claimed 1 dependent in 2019 and I owe 350.00 past child support living in Michigan. Will I get a stimulus check

  7. Gravatar for Larry
    Larry

    How do I receive my stimulus if I have no W2 for 2018 or 2019 and single living at friends home?

  8. Gravatar for Christi H.
    Christi H.

    My husband owes back child support but i filed injured spouse on my taxes this year. Will i get my part of the money even if he doesnt get his?

  9. Gravatar for Elizabeth
    Elizabeth

    My husband is paying on back pay child support. We file out taxes joint, we have 3 of our own dependents and file an injured spouse form every year. Will they garnish his portion of the stimulus check or the whole amount we qualify for?

    1. Gravatar for Kelly Dell
      Kelly Dell

      Gravatar for Kelly Dell

      Kelly Dell

      APR 21, 2020 AT 10:00 AM

      I am wondering the same thing. I have a child of my own and dont believe my husbands EX should be entitled to that. I get that he owes but keep his $1200 and give me my $1700. If you found out anything could you let me know?

      Reply

  10. Gravatar for Misty Scott
    Misty Scott

    My husband owes back child support. We always file injured spouse. Does anyone have any information on how the stimulus check will be paid out? Also do I need to file another injured spouse form for the stimulus check?

    1. Gravatar for Kelly Dell
      Kelly Dell

      I am wondering the same thing. I have a child of my own and dont believe my husbands EX should be entitled to that. I get that he owes but keep his $1200 and give me my $1700. If you found out anything could you let me know?

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