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Seton Hall University

Q&A with Tax Policy Expert on Payments to Individuals from The COVID-19 Stimulus Package  

Capital BuildingCongress has passed unprecedented legislation to address the coronavirus pandemic and the economic fallout stemming from it. The measure authorizes the IRS to make payments to most individuals. Here are some answers to key questions about those payments.

1. Who will get a check and who won't?

Anyone who files a tax return will get a check. Checks will also go to non-filers who receive social security retirement or disability benefits. Unfortunately, many people neither receive these benefits nor file a tax return because their incomes are too low. This raises the prospect that some individuals who are most in need will not get a check. Nonresident aliens are also ineligible for the program.

2. How much money can anyone expect to receive?

Individuals will receive $1,200 if their adjusted gross income is under $75,000, while married couples who file a joint return will get $2,400 if their adjusted gross income is less than $150,000. Single parents will get the $1,200 maximum if their adjusted gross income is under $112,500. The size of the check is reduced above those income thresholds until they are phased out completely for individuals whose incomes exceed $99,000 and couples whose incomes exceed $198,000.

Richard Winchester

Richard Winchester

Recipients will receive an additional $500 for each child they claim as a dependent on their tax return, as long as that child meets a number of additional conditions. Among other things, the child must be younger than 17 years old.

Adults who can be claimed as a dependent by someone else won’t receive anything. In many cases dependents are elderly adults who are claimed as a dependent by their adult children.

3. What does someone have to do to get their check?

In most cases, nothing. The IRS will make the payments directly to eligible recipients based on information already on file. Anyone who authorized the IRS to direct deposit their tax refund will receive this payment by direct deposit too.

However, the IRS will use information on a person's tax return to determine whether someone is entitled to a check and the amount they should receive. If you filed a tax return for 2019, the agency will use that return. If not, the agency will use your 2018 return. However, anyone who has not filed either return should file a return for 2019 as soon as possible, even if they owe no taxes. That will prevent them from being overlooked for these payments.

4. Do you need to be unemployed to get the checks?

No. You do not need to be unemployed to receive a check. This check goes to nearly every American who falls below the income limits. The legislation includes a separate provision to address unemployed individuals.

Richard Winchester is a Visiting Professor of Law at Seton Hall University School of Law and is a national authority on small business and federal employment tax policy. His work is frequently cited in Congressional Reports on tax matters and prior to teaching worked as a corporate tax attorney for PricewaterhouseCoopers in its National Tax Office. Click here to read more.

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