WOODS CROSS — Many Utahns are anxiously awaiting the federal stimulus money Congress and President Donald Trump have said is coming in a matter of weeks.
However, those stimulus checks come with caveats that may leave some waiting longer for their infusion of cash, while others may have to pay some of that money back to the IRS next year.
The stimulus is being given to folks based on their financial situation right now. The IRS will base their calculations on the taxes you filed for what you made last year. If you haven’t filed your 2019 taxes yet – the deadline has been pushed back to July 15, 2020 – the stimulus check will be based on your 2018 taxes.
A couple who filed jointly and made less than $150,000 last year can receive up to $2,400 in stimulus money. What happens if they’re no longer married? Or taxpayers will get an extra $500 for each qualifying child, but what if your dependent has left for college since your last filing and is not a dependent anymore? Or what if you make more – or less – since you last filed taxes?
These questions, and others about the stimulus checks, are keeping professional tax preparers like Brian Horne of Affordable Tax and Accounting busy.
His most common answer?
“Well, the rebate (stimulus) checks that are coming out are not really a rebate check or just a check,” Horne said. “It’s an advance on a credit for next year.”
The IRS is estimating how well you’re going to do in 2020 based on how well you did in 2019, or 2018 if you haven’t filed taxes for 2019 yet.
Millions of Americans are about to see their rebate money direct deposited in their bank account. If your financial situation has changed since your last filing, you will not be able to straighten it out until you do your 2020 taxes next year, Horne said.
“If there are credits you didn’t get, you will then get them into the next year when you file your taxes,” he said.
For some, that could be very bad news. Folks who made too much in 2019 to qualify for a rebate, but have since lost their jobs due to the COVID-19 pandemic, may have to wait until 2021 to get the stimulus they could really use right now.
If you’re lucky enough to find yourself in a better financial position by the end of this year, Horne said you may wind up owing the IRS next year.
“If you received a credit you should not have received, you’ll probably have to pay it back,” he said.
So, if the IRS cuts you too big of a stimulus check you might have to pay back the difference on April 15, 2021. On the other hand, if your stimulus check is too small, you’ll get to pocket the difference next year.
Horne’s last bit of advice is to be prepared and patient. Sure, some bureaucrats said the checks should be delivered within weeks, but Horne is not holding his breath.
“I don’t expect it anytime soon. The last time they (federal government) did something like this, it took about two months,” he said.
If your address has changed since your last tax filing, the IRS said you should fill out their Form 8822.
If you need to update or add your bank account information with the IRS so it can direct deposit your stimulus money, the IRS said it is developing a web-based portal to allow you to do that online in the next few weeks.
More information on that and other aspects of the stimulus can be found here.
Otherwise, the IRS will deposit the stimulus money into the same bank account spelled out in your last filed tax return.
More information from the Associated Press:
Who is eligible for the payments?
Anyone earning up to $75,000 in adjusted gross income and who has a Social Security number will receive a $1,200 payment. That means married couples filing joint returns will receive the full payment — $2,400 — if their adjusted gross income, which what you report on your taxes, is under $150,000.
The payment steadily declines for those who make more. Those earning more than $99,000, or $198,000 for joint filers, are not eligible. The thresholds are slightly different for those who file as a head of household.
Parents will also receive $500 for each qualifying child.
What do I have to do to get the check?
For most people, nothing.
The money will be directly deposited in your bank account if the government has that information from your tax return. If you haven’t filed your 2019 taxes, the government will use information from your 2018 taxes to calculate your payment and determine where to send it. It can use your Social Security benefit statement as well.
I don't usually have to file taxes. Do I still get a payment?
Yes. People who are not required to file a tax return — such as low-income tax payers, some senior citizens, Social Security recipients, some veterans and people with disabilities — will need to file a very simplified tax return to receive the economic impact payment. It provides the government basic details including a person's filing status, number of dependents and direct-deposit bank information.
I haven't filed my 2018 or 2019 taxes. Will I still get a payment?
Yes, but the IRS urges anyone required to file a tax return and has not yet done so for those years to file as soon as possible in order to receive an economic impact payment. Taxpayers should include their direct-deposit banking information on the return if they want it deposited in their account.
I didn't use direct deposit on my taxes. What can I do?
The government will default to sending you the check by mail if you did not use direct deposit.
However, IRS and Treasury say that they will develop an online portal in the coming weeks for individuals to provide their banking information so that they can receive the payments immediately instead of in the mail. It has not yet set a deadline for updating that information.
Where do I do this?
The IRS and Treasury say the website irs.gov/coronavirus will soon provide information about the check, including how people can file a simple 2019 tax return.
I need more time to file my tax returns. How long do I have to get the payment?
The IRS says people concerned about visiting a tax professional or local community organization in person to get help with a tax return should not worry. The economic impact payments will be available throughout the rest of 2020.