What to Expect with New Round of Stimulus Payments

anglinWEB210106-StimulusPaymentsOn December 27, 2020, President Trump signed a $900 billion COVID-19 relief bill that provides additional economic relief to individuals and businesses who have been financially impacted by the pandemic. The CARES Act, which was passed March of 2020, included a stimulus payment worth up to $1,200 for individuals or $2,400 for couples. The most recent relief bill, Consolidated Appropriations Act (CAA, 2021), provides a second stimulus payment for individuals and couples.

Learn more about the details of this stimulus payment and how you can expect to receive it. If you have already received it, let us know if you have questions for tax planning purposes.

Who is Eligible to Receive the Second Economic Impact Payment?

You may be eligible to receive the Economic Impact Payment if:

  • You’re a U.S. Citizen or U.S. resident alien
  • You are not listed as a dependent on another taxpayers 2019 tax return
  • You have a social security number
  • Adjusted gross income (AGI) does not exceed $150,000 if married and filing jointly, $112,500 if filing as head of household or $75,000 for individuals using any other filing status.

How Much is this Payment Worth?

Eligible couples who filed as married filing jointly on their 2019 tax return will receive up to $1,200 and all other eligible individuals will receive up to $600. Those with qualifying children on their 2019 tax return will also receive up to $600 per qualifying child.

High income individuals will receive a payment amount reduced by 5% of the amount that their AGI exceeds the qualifying income thresholds listed above.

Income Thresholds

Individuals and couples will not qualify for the Economic Impact Payment if their AGI reaches the following amounts:

  • $174,000 for taxpayers filing a joint return
  • $124,500 for taxpayers filing as head of household
  • $87,000 for taxpayers filing as single or married filing separately

How Will I Receive My Payment?

In most cases, no action is necessary. Your payment will be issued to you based on the direct deposit information provided to the IRS on your 2019 tax return. If the IRS does not have routing and account information for you, you will receive your Economic Impact Payment in the mail in the form of a check or debit card.

If you don’t receive the Economic Impact Payment from the IRS but meet the requirements, you can claim this payment when filing your 2020 tax return as the Recovery Rebate Credit.

Non-filers who received the first stimulus payment by providing the IRS with direct deposit information through the Get My Payment Tool will receive this second stimulus payment the same way. If a non-filer did not provide direct deposit information using the IRS’ Get My Payment Tool, the first and second stimulus payment can be claimed by filing a tax return in 2020.

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