As the COVID-19 pandemic continues to threaten the world, the United States economy has slowed significantly or nearly shut down in some areas.
Because of the required actions to slow the spread of the coronavirus, most non-essential businesses have been forced to shut down, resulting in millions of layoffs.
To combat the economic effects of COVID-19, congress passed a $2 trillion stimulus package. Included in the stimulus package is a provision that will supply most Americans with a one-time check to help them through this crisis.
Here is what you need to know about the 2020 stimulus checks.
How Many Checks Will I Get?
These checks are only a one-time payment. You may have heard various ideas being thrown around, such as ongoing payments. However, the bill which President Trump signed into law allows for a one-time payment to individuals.
How Much Are the Checks?
The amount of your check depends on how you file your taxes and your income levels. If you are an individual taxpayer, you will be eligible to receive a $1,200 check. If you are married and filing jointly, then both you and your partner will receive a $1,200 check, for a total of $2,400.
Further, you will receive an additional $500 for each child if the child qualifies you for the child tax credit. To qualify for this credit, the child must not be older than 16 years of age. So, if you are a married couple filing jointly with two young children, you could be eligible for a total of $3,400.
Now, keep in mind that the amount of the check also depends on your income. If you make a higher income, your eligibility will gradually phase out.
If you are single, married filing separately, or if you are a qualifying widow or widower, your income must be below $75,000 in order to receive the full $1,200 check. If your income is above $75,000, your check amount will be reduced by $5 for every $100 in income over the $75,000 threshold. And if you fall into this category, but your income is over $99,000, you will not receive a stimulus check at all.
Now for married couples, your combined income must be below $150,000 to receive the full benefits of the stimulus check. If you are married and filing taxes jointly, the same phase out rules apply. However, if your joint income is over $198,000, you won’t be eligible for a check.
If you are head of household, you can receive the $1,200 if your income is below $112,500. If your income is above $112,500, the same phase out rules apply. If you earn more than $136,500 as head of household, you will no longer be eligible to receive a check.
How Is Income Determined?
If you already filed your 2019 tax return, that will be the income that the government uses when determining eligibility for the 2020 stimulus check. If you haven’t filed your 2019 taxes yet, your 2018 income tax return will be used.
Is this a perfect way to determine who gets a check? Of course not. But it’s what the stimulus bill calls.
Who Gets a Check?
If your income permits you to receive a stimulus check, then there are certain qualifications you must meet. First, you must have a Social Security number in order to receive a relief check. Unfortunately, non-citizens without green cards do not qualify for relief checks.
Second, if you’re considered a dependent, you do not receive a check. Parents of children under 16 can receive a check for their children, but the check does not go to the child.
How Will You Receive Your Check? And When?
If you used a direct deposit account when filing your taxes, your stimulus check or checks will be deposited there. If you didn’t, the government will mail a check directly to you. I imagine this will be an address used in your latest tax return. For some this process will be simple, especially if the bank account they used for tax refund direct deposit is still open, and for others it may be a bit of a mess (especially if your address has changed).
According to the Treasury Secretary, people should start seeing their stimulus checks within three weeks. Of course, it’s prudent to expect it to take longer, especially if a paper check needs to be mailed.
Tips for Using Your Check
How you use your check is completely up to you, but here are some ideas to get started.
Budget It for Immediate Needs
If you or your spouse was laid off due to the coronavirus outbreak, use the stimulus check to budget for your immediate needs. Start by writing down your spending in order of priority. Typically, most people need to spend money on rent, food, and other bills first.
If the stimulus check doesn’t go too far in your budgeting, think through some of the other aid you have access to. Unemployment has been expanded in some regards, which could mean a higher payment than if you had gone on unemployment prior to the crisis. Many1 companies are working with those affected by layoffs by making payment plans or alternative payments. For example, SoFi is offering 60 days of forbearance for student loan borrowers who have been financially impacted by COVID-19.
Another example of relief is with federal student loans. The Department of Education has suspended all payments until September 30th, 2020.
Call any service providers and explain your situation to see if they are willing to be flexible with payment plans.
Spend It
These checks are called stimulus checks because they are attempting to encourage citizens to spend money to get the economy going again. So, if you find yourself in a secure financial position, you can treat this as an unexpected bonus.
Spending your check in your local community is a great way to help the local economy. Small businesses are struggling now more than ever, so your business is greatly appreciated at this time.
Donate It
Again, if you are able to, feel free to donate your check to an organization in need.
Nonprofits are working overtime in order to provide support to those who are affected by layoffs, and many are postponing or cancelling fundraisers that they rely on to continue operations.
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Why are dependents left out of the stimulus program ??? This dosen’t seem fair,,,