Tag Archives: Stimulus Payments

New Relief Package Passes Congress

I will be spending the afternoon in webinars learning the details of the recent financial relief package that will become law soon, including “PPP2”, and will share what I learn in a post here later today. In the meantime, the National Association of Tax Professionals has prepared a summary for its members — it’s the clearest, most succinct explanation of “what you need to know” that I’ve read in the past two days. Many thanks to them for allowing us to pass along this info to clients.

Both houses of Congress voted to pass the latest COVID relief legislation and all indications are that the president will sign it into law. We know that more guidance will be provided as this rolls out, but here are the highlights as we know them:

PPP and small business support: New COVID-19 relief package provides much needed support for small businesses. Business expenses paid for with the proceeds of PPP loans are tax deductible, consistent with Congressional intent in the CARES Act. In addition, the loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less. Unspent funds totaling $138 billion will be reinvested in the PPP program.

Economic impact payments (EIP): The bill includes a second round of EIPs for qualifying Americans.

The IRS will use the data it already has in its system to begin making payments at the end of December through the first two weeks of January. If the IRS has your direct deposit information, you will receive a payment that way. If it does not, you will receive your payment as a check or debit card in the mail. If you are eligible but don’t receive your check for any reason, you can claim the payment when you file your 2020 taxes in the spring of 2021.

In regards to eligibility, any person who has a valid work-eligible Social Security number (SSN), is not considered as a dependent of someone else and whose adjusted gross income (AGI) does not exceed certain thresholds (see below) is eligible to receive the credit. This means workers, those receiving veterans’ benefits, Social Security beneficiaries and others are all eligible.

  • Spouses of military members are eligible without an SSN
  • An adopted child can use an Adoption Tax Identification Number to be eligible

Under the CARES Act, joint returns of couples where only one member of the couple had an SSN were ineligible for a rebate. This latest round of relief changes that provision. These families will now be eligible to receive payments for the members of the family who have SSNs. This change is retroactive, meaning those who fall under this category who missed out on the first round of EIPs can claim that money when filing 2020 tax returns in the spring of 2021.

The full credit amount is $600 per individual, $1,200 per couple and $600 for children. It is available for individuals with AGI at or below $75,000 ($112,500 for heads of household), and couples with AGI at or below $150,000. If you have children, you will receive an additional $600 per child.

For those above this income level, your tax rebate amount will be reduced by $5 for each $100 your AGI exceeds the above thresholds.

This means:

  • An individual without children will not receive any rebate if their AGI exceeds $87,000.
  • A couple without children will not receive any rebate if their AGI exceeds $174,000.
  • A family of four will not receive any rebate if their AGI exceeds $198,000.

The IRS will use the same methodology for calculating payments as it did for the first round of economic impact payments.

Unless obtained by fraud, rebate checks do not need to be repaid. If an individual experienced an income loss in 2020, or if they have an increase in family size, they may be able to claim an additional credit of the difference when the individual files their 2020 tax federal income tax return in spring of 2021.

If you are eligible and the IRS does not have your direct deposit information, you will receive your payment as a paper check or a debit card as long as the IRS has your address. If the IRS does not have updated contact information for you, you can claim the payment when you file a tax return in spring 2021.

Someone who is claimed as a dependent on another taxpayer’s tax return is not eligible to receive the $600 refund check themselves. Children 17 and older are not eligible for the $600 per child tax credit.

For those with taxable income, you will need to file a tax return for the 2020 tax year, which you can do during the coming filing season that is expected to begin in late January and end on April 15, 2021. Those with little or no taxable income are encouraged to use the IRS’ free file program.

Other than Social Security beneficiaries (retirement and disability), railroad retirees and those receiving veterans’ benefits, individuals with no taxable income will be able to file a simple form provided by the IRS specifically for the purpose of receiving the rebate check.

Social Security retirement and disability beneficiaries, railroad retirees and those receiving veterans’ benefits do not need to file to receive their rebate. The IRS has worked directly with the Social Security Administration, Railroad Retirement Board and the Veterans Administration to obtain information needed to send out the rebate checks the same way benefits are paid.

The credit is not taxable, consistent with other refundable tax credits.

The rebate is considered a tax refund and is not counted towards eligibility for federal programs for both income and asset test purposes. The rebate checks are not subject to the majority of offsets, including student debt and state debts. The only administrative offset that will be enforced applies to those who are subject to a child support garnishment court order.

A family with a child born in 2020 is eligible for the $600 per child rebate amount (assuming all other requirements are satisfied). The IRS will calculate the payment based on the most recent tax data in its system. If a child was born since the family’s last filing, the family will not automatically receive the $600 rebate amount for the child born in 2020. To receive the credit the family can claim the $600 credit on their 2020 tax return filing made in spring 2021.

If you believe you are eligible for an economic impact payment but did not receive a round one or round two payment, you will have the opportunity to claim the payment on your 2020 tax return. This year’s tax forms will provide a place for individuals to claim the payments. If you don’t normally file taxes and are eligible for a payment, make sure to file a return this spring to claim the payments.

The IRS has not announced the exact date the coming filing season will begin, but it typically begins near the end of January. If you need to update your information by filing your tax return, keep an eye out for an IRS announcement about the start of the filing season.

Individuals can claim the payment by filing a simple tax return when the tax filing season opens in late January 2021.

Unemployment assistance: For those who are unemployed, the pandemic unemployment insurance program will be extended by 16 weeks. Supplemental federal unemployment benefits of $300 per week will continue into April 2021 instead of ending in December.

Rental assistance: The current CDC eviction moratorium will be extended until Jan. 31, 2021.

Student loans: Extension of student loan forbearance provisions created in CARES and extended by executive order, from the current expiration date of Jan. 31, 2021 through April 1, 2021.


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IRS Switching to Prepaid Debit Cards For Stimulus Payments


UPDATE 6/7/2020 — per the IRS: there are two recent changes from MetaBank, the issuing company for the EIP Card program. Individuals who have lost or destroyed their EIP Card may request a free replacement through MetaBank Customer Service. The standard fee of $7.50 will be waived for the first reissuance of any EIP Card. The company has also increased the limit on ACH transfers to a bank account from $1,000 to $2,500 per transaction.  Additional information is available at EIPcard.com and the IRS FAQs, starting at Question 45.

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HEADS-UP — if you have not already received your stimulus check, it may be arriving in the form of a prepaid debit card.

The IRS sent a reminder to taxpayers this week confirming that some Economic Impact Payments are being sent via prepaid debit card instead of paper check. The debit cards arrive in a plain envelope from “Money Network Cardholder Services.” Nearly 4 million people are being sent their Economic Impact Payment by prepaid debit card.

CPA Practice Advisor reports, “IRS began distributing economic stimulus payments in April via direct deposit to taxpayers who had up-to-date information on file. It followed up with payments by paper check starting in mid-May. However, the agency estimated it might take as long as four to five months to mail out the millions of remaining checks. Now it says that sending four million prepaid debit cards will cut down on the time.”

Per the Treasury Department’s press release:

EIP Card recipients can make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees. They can also check their card balance online, by mobile app, or by phone without incurring fees. The EIP Card can be used online, at ATMs, or at any retail location where Visa is accepted.

This free, prepaid card also provides consumer protections available to traditional bank account owners, including protections against fraud, loss, and other errors. 

Hopefully this will not end up like the fiasco whereby folks have been throwing out their prepaid Key Bank cards loaded with unemployment funds.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Update Stimulus Check Direct Deposit Info With IRS By May 13th

Per the IRS on May 8th:

Starting later this month, the number of paper checks being delivered to taxpayers will sharply increase. For many taxpayers, the last chance to obtain a direct deposit of their Economic Impact Payment rather than receive a paper check is coming soon. People should visit Get My Payment on IRS.gov by noon Wednesday, May 13, to check on their payment status and, when available, provide their direct deposit information.

The IRS, working in partnership with Treasury Department and the Bureau of Fiscal Services (BFS), continues to accelerate work to get Economic Impact Payments to even more people as soon as possible. Approximately 130 million individuals have already received payments worth more than $200 billion in the program’s first four weeks.

With a variety of steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon Wednesday, May 13, for a chance to get quicker delivery.

See this handy blog post for tips, tools and resources on IRS Stimulus Payments.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

IRS Stimulus Check Tools & Resources

UPDATE 4/24: Reported by a client — and tested independently: YOU MUST ENTER YOUR EXACT ADDRESS AS IT IS LISTED ON YOUR TAX RETURN TO GET ANY OF THE TOOLS TO WORK.
E.g., if your return abbreviates “Drive” as “DR” or “Dr.” or “Drv”… this will make a difference. Be sure to type the address into the tools exactly as it is represented on your most recent tax return.

UPDATE 4/27: The IRS made significant improvements to the “Get My Payment” system this past weekend and asks those who had issues with it before to please try again.

UPDATE 4/27: When the system asks you to enter your refund from a prior year (to confirm identity), they mean the actual amount disbursed to you — not the amount rolled forward to your quarterly taxes.

UPDATE 4/29: On an NATP webinar today, I learned that there’s no auto-formatting in any of the IRS tools — you must enter dashes in your SSN and slashes when entering dates.

The stimulus checks are on their way, and have already found themselves popping up in bank accounts across the country. Here are a few tools you can use to calculate how much you should expect to receive, and to inform the IRS of your bank account information for direct deposit.

How Much Is My Stimulus Check Going to Be?

Forbes has put together a nice little calculator for you. They also do a good job of answering some common questions and explaining the source of info the IRS will use for its calculations:

For those who have filed their 2019 taxes, they will be used to determine eligibility. For those who have not filed 2019 returns, their 2018 tax returns will be used. Those who receive Social Security (either retirement or disability) but didn’t file a return in 2018 or 2019 (because they earn too little to be required to file), will also receive stimulus checks, based on the information sent to the IRS on 2019 forms SSA-1099 and RRB-1099.

Do not just presume that you aren’t entitled to a payment because you think you made too much money. For one, the stimulus check amount gets phased out over a wide range of income — it’s not like it just cuts off if you made over a certain dollar amount. Secondly, some folks think they made too much because of W-2 or investment income, but various deductible losses actually brought the adjusted gross income (AGI) below the required limit. So go check on it, and update your bank information (below) with the IRS just to be safe.

When Will My Stimulus Check Arrive?

Hopefully it will arrive via direct deposit in the next couple of weeks. But you don’t have to guess — you can look up the status on “Get My Payment“, a new IRS tool which will also allow you to enter direct deposit information if you have not already been getting refunds in that manner. Again, Forbes is doing a great job reporting on this — they actually walk you through the process on the website step-by-step with screenshots.
Note: Be sure to type all information, including the address abbreviations, exactly as it is represented on your most recent tax return. Use dashes in your SSN and slashes in your dates.

How Do I Update My Direct Deposit Information with the IRS?

If you’re a regular filer and you simply have been receiving paper checks or rolling your refund forward — and therefore do not have direct deposit information on-file with the IRS — simply use the “Get My Payment” tool I just mentioned above. Here are instructions on how to update your bank information using that tool.
Note: Be sure to type all information, including the address abbreviations, exactly as it is represented on your most recent tax return. Use dashes in your SSN and slashes in your dates.

If you haven’t filed a return because you’re below the income limits or you receive veterans benefits, then use the tool the IRS designed specifically so you can get your stimulus check. More info on that tool here, including situations when you should or should not use it.
Note: Be sure to type all information, including the address abbreviations, exactly as it is represented on your most recent tax return.

Social Security and Railroad Retirement Benefits recipients will receive their stimulus check automatically — no need to use either of the above resources.

What If I Got My Refund Via A Loan Or Advance?

The IRS will either direct deposit your money or send you a check, depending on whether or not your underlying bank information was transmitted to them with your tax return. More info on that here.

What if I Am A Dependent? What If My Kid Lives With Me But Is Not A Dependent?

The first question is easy: dependents aren’t eligible for these payments. Parents get an additional $500 per child instead. Unless (second question)… they’re over 16. Another Forbes article here commiserates with those in this situation.

The IRS is updating its FAQ regularly, so check back if you don’t initially find the answer to your question.

And you know what they say: don’t spend it all in one place.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Coronavirus Stimulus Checks: Calculate How Much You Will Receive

Great, short article from the Washington Post that answers many questions about the stimulus payments and helps you calculate yours:

Coronavirus stimulus checks: Calculate how much you’ll get, $1,200 or more – Washington Post


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.