By Jennifer Meyer, Financial Planner
There has been a lot of attention given to the government’s proposed fiscal stimulus package. Now that a plan has been passed- what are the details of the payments that are being promised to Americans? Here are the answers to your questions-
How much is the payment and who is eligible?
The proposed plan provides a payment of $1200 per adult and $500 per child under the age of 17 for households that meet the following criteria-
(a.) If your adjusted gross income is under $75K, you will qualify for the full amounts.
(b.) If your adjusted gross income is between $75K- $99K you will qualify for a reduced payment.
(c.) If your adjusted gross income is over $99K- you are not eligible for a payment.
(a.) If your adjusted gross income is under $150K, you will qualify for the full amounts.
(b.) If your adjusted gross income is between $150K- $198K you will qualify for a reduced payment
(c.) If your adjusted gross income is over $198K- you are not eligible for a payment
What tax year is AGI based on?
If you have already filed your 2019 taxes- it will be based on that return.
If you have not yet filed (remember the filing date has been pushed to July 15th), then it will be based on your 2018 tax return.
I am eligible! When and how do I get my check?
Secretary Mnuchin indicated the payments could be in the hands of taxpayers in as little as two weeks. If history is any indication- that is not likely to happen. First, the IRS will have to determine who is eligible and calculate the amount of each household’s payment. Then, it will need the correct direct deposit or mailing address information for each recipient. In 2008 it took up to 3 months to receive payments once approved. However, the good news is that it is likely that payments would be received faster this time around due to the increase in use of direct deposit now versus 2008. In 2008 only 58% of returns were filed electronically- in 2018 that percentage was 88%. It is reasonable to think that payments can be made in less than 3 months- but 2 weeks would be ambitious simply based on the volume of work that needs to be done. It is not as simple as just writing a check.
Do I need to do anything to claim my payment?
As of this writing, there is no indication that taxpayers will need to file anything in order to receive payment. Please keep tuned in as we will update with the latest news when it becomes available.
**Written by Jennifer Meyer, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jennifer Meyer and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.**