April 1, 2020
U.S. CARES Act: Economic Impact Payments
The U.S. Treasury Department and the IRS announced on March 30, 2020 that the distribution of Economic Impact Payments (also referred to as Recovery Rebates) will begin in the next 3 weeks and will be distributed automatically. The payments will be based on information from the taxpayer’s 2018 or 2019 Income Tax return and no action is required for most people. The payments will be directly deposited into the bank account listed on the tax return or the check will be mailed out.
Eligibility and Payment amount
Full eligible payment of up to $1,200 per adult individual will be paid out to tax filers with adjusted gross income (AGI) up to $75,000 (and $150,000 for married filing jointly or “MFJ”). The payment is phased out at AGI exceeding these thresholds, and at AGI of $99,000 (or $198,000 for MFJ), the taxpayers are not eligible for the payment.
The additional $500 is paid for each child that qualifies for the child tax credit, generally, a dependent child who is aged 16 or younger.
Nonresident aliens are not eligible for the payments.
If anyone has not filed a tax return for 2018 or 2019 or any information on the 2018 tax return has changed, they are encouraged to file as soon as possible so the IRS will have the most up to date information and receipt of the payment will not be delayed.
Related article: U.S. Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The above content is believed to be accurate as of the date of posting. Canadian and U.S. tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained herein.