Economic Stimulus or Economic Impact Payment FAQs

 

 

Please note: Information about the Economic Impact Payment Program has been changing frequently. Please refer to this page of the IRS website for the most current information.

California recently enacted a coronavirus relief package (the “Golden State Stimulus” package) providing much-needed relief to the state’s small businesses and stimulus payments to low-income residents. Click here to learn more about the Golden State Stimulus.

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Watch our webinar about how pandemic payments may impact your 2020 taxes:

 

 

The recently enacted Consolidated Appropriations Act, 2021 includes COVID-19 tax relief legislation.  The legislation is intended to provide further economic relief to address the impact of the ongoing COVID-19 pandemic.  COVID-related tax relief to individuals would come in the form of a second round of Recovery Rebate Credits (an Economic Impact Payment).

  • Who is eligible for the Economic Impact Payment? U.S. citizens or resident aliens who:
    • Have a valid Social Security number
    • Cannot be claimed as a dependent of another taxpayer, and 
    • Had adjusted gross income under certain limits.
  • Who will receive the Economic Impact Payment automatically without taking additional steps?
    • Individuals who received a “first round” Economic Impact Payment
    • Individuals who filed a federal income tax for 2018 or 2019
    • Individuals who receive Social Security retirement, disability (SSDI), or survivor benefits
    • Individuals who receive Railroad Retirement benefits
    • Individuals who receive Supplemental Security Income (SSI)
    • Veterans Affairs recipients
  • What if none of the above apply to me?

You would claim the Recovery Rebate Credit (if eligible) on your 2020 income tax return and receive a payment for the full amount of the first and second round of Economic Impact Payments in the form of an income tax refund

  • How much is the Economic Impact Payment?

The second round of the Economic Impact Payment is $600 ($1,200 for married taxpayers). Parents also receive $600 for each qualifying child.  In general, a child who lives in the U.S., is under 17 years of age, and has a social security number is a qualifying child.

  • I receive Social Security Disability (SSDI) and it says that my Economic Impact Payment Income will be sent to me automatically but, will I receive an additional $500 for each of my dependents as well?

Clients who don’t have a filing requirement and haven’t filed a return recently but who receive federal benefits like Social Security retirement, SSI, SSDI, Railroad Retirement Benefits, or Veteran’s benefits also don’t need to do anything. Their Economic Impact Payment will be automatically paid using the method they usually receive their benefits.

If you have dependents under 17, and want to receive the additional $500 per child. You must use the nonfiler tool to provide information on the dependent: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

  • Do I qualify for the Economic Impact Payment if  I have an Individual Taxpayer Identification Number (ITIN)?

No,  you must have a Social Security number to receive the payment. However, there may be a program through the State of California or locally that can help you. Please check back on this page at a later date or send an email to admin@tax-aid.org.

  • I filed a joint return with my spouse.  Will we receive the Economic Impact Payment if I have a valid SSN and my spouse has an IRS Individual Taxpayer Identification Number (ITIN)?

Yes, married taxpayers filing joint returns where one spouse has a Social Security Number and one spouse does not are eligible for a payment of $600 in addition to $600 per child with a Social Security Number.

  • My children have Social Security numbers but I have an ITIN, do I qualify for Economic Impact Payment?

No, unfortunately, the primary taxpayer must have an SSN that’s valid for employment for a qualifying child to be considered eligible for the payment. However, there may be a program through the State of California or locally that can help you. Please check back on this page at a later date or send an email to admin@tax-aid.org.

  • What if I do not usually file a return? How will I get my Economic Impact Payment?

If you receive veteran’s disability compensation, a pension, or survivor benefits from the Department of Veterans Affairs, or your income level does not require you to file a tax return, then you need to submit information to the IRS to receive an Economic Impact Payment. Click on this link to update your information with the IRS: https://www.freefilefillableforms.com/#/fd/EconomicImpactPayment

      • Is the Economic Impact Payment taxable?

      No.  It is not taxable. People who receive an Economic Impact Payment this year should keep Notice 1444, Your Economic Impact Payment, with their tax records. This notice provides information about the amount of their payment, how the payment was made, and how to report any payment that wasn’t received.

      For security reasons, the IRS mails this notice to each recipient’s last known address within 15 days after the payment goes out. It’s especially important for people to keep this notice if they think their payment amount is wrong. When they file their 2020 tax return, they can refer to Notice 1444 and claim additional credits, if they are eligible for them.

      Taxpayers should keep this notice filed with all their other important tax records. These include W-2s from employers,1099s from banks and other payers, other income documents, and virtual currency transaction records.

      • What do I need to do to receive the payment?

      No action is required if you have filed a 2018 or 2019 tax return or if you currently receive social security benefits.  The federal government will use this information to identify eligible individuals who should receive an Economic Impact Payment. Click here to check your payment status.

      • What if I only receive Social Security retirement income?

      If you receive Social Security retirement, disability (SSDI), survivor benefits, Supplemental Security Income (SSI), or Veterans Affairs benefits, the IRS will automatically send you an Economic Impact Payment. You do not need to fill out any forms.

      • How will I receive the Economic Impact Payment?

      If you filed a 2018 or 2019 income tax return and provided direct deposit banking information on your tax return, the payment will be deposited directly into that bank account. The government has already begun making distributions through electronic transfers.

      For those that have not filed 2018 or 2019 income tax returns with direct deposit banking information, then a check will be mailed to you using the last known address on file with the IRS or social security administration.  It is anticipated checks would not be mailed until late Spring or early Summer 2020. If you would like to have the Economic Impact Payment directly deposited into your account, use the ‘Get my payment’ portal.

      • What if I did not use a direct deposit for my 2019 return? The IRS has added a ‘Get my payment’ portal. The portal will allow you to
        • Check the payment status
        • Enter your payment type
        • Let you know if the IRS needs more information
      • What if I requested a refund check on my 2019 tax return or I have moved?  How will the IRS know my address?

      Click on this link to update your address with the IRS:

      https://www.irs.gov/coronavirus/economic-impact-payments

      • I am in college. Can I receive an Economic Impact Payment?

      Yes.  So long you file a 2018 or 2019 tax return and are not claimed as a dependent on another person’s tax return.

        • The IRS has already begun sending out the second round of Economic Impact Payments. Payment amounts will vary based on income, filing status, and family size.
        • What if I did not receive the first round of Economic Impact Payments or what if the amount I received is incorrect? For those people who did not receive a first-round Economic Impact Payment or believe the amount is incorrect, you would claim the Recovery Rebate Credit (if eligible) on your 2020 income tax return and receive a payment in the form of an income tax refund.