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Consumer Protections and Scams: What Should I Know about the Economic Impact Payment or Stimulus Check if I Regularly File Taxes?



What is the purpose of the economic impact payment, also knows as a “stimulus check”?

On March 27, 2020, the Coronavirus Aid, Relief and Economic Stimulus “CARES” Act became law.  This law created a one-time payment to many people in the United States from the federal government. The reason for the payment is to help people financially who face economic hardships caused by the coronavirus pandemic.  The government also wants to boost spending power and spur economic activity.

Who is eligible for the economic impact payment?

Any individual in the United States is eligible for the payment except someone who is a nonresident alien or a person who can be claimed as someone else’s dependent.

How much is the payment?

  • Individuals who report adjusted gross income up to $75,000 on their tax returns will receive $1,200.
  • Married couples who earn up to $150,000 and file a joint tax return will receive a payment of $2,400.
  • Parents or caregivers may receive up to $500 for each qualifying child claimed as a dependent.

The payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds.  For example, an individual who reports gross income of $80,000 would get $950 instead of $1200 (50 X 5 = $250; $1200 - $250 = $950).

Must I file at tax return to receive the payment?

Yes.  The IRS requires the filing of a tax return for the 2018 or 2019 tax year to receive a payment.

What should I do if I have not filed a tax return for the 2018 and the 2019 tax years?

File a tax return electronically for either or both years.  If possible, include direct deposit banking information on the return. Filing a tax return electronically will speed up the processing time. It could take six to eight weeks to receive a stimulus check if you file and mail a paper return.

  • The IRS has a free tax filing service at https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.
  • There is also a commercial cite, FreeTaxUSA that prepares for free: https://www.freetaxusa.com/
  • If you have low income, you can request help from the Earned Income Tax Credit Coalition. Individuals in need of help will have 3 options for how to access assistance, depending on personal preference and access to technology.  To request services, send an email to support@refundohio.org with name, phone number and what assistance is needed.  A volunteer from the EITC will call to follow up.

The Cuyahoga Earned Income Tax Credit Coalition is launching virtual tax preparation services. This free service for low income residents replaces the usual Volunteer Income Tax Assistance (VITA) program. Individuals in need of help will have 3 options for how to access assistance, depending on personal preference and access to technology. The EITC will also help non-filers register for their stimulus checks via the IRS non-filer tool To request services, send an email to support@refundohio.org with client’s name, phone number and what assistance they need. A volunteer from the EITC will call to follow up. In the meantime, the Coalition will return to in-person tax preparation assistance as soon as the Governor lifts the stay at home order.

Will the stimulus funds I receive affect my 2020 federal tax return?

Yes. The stimulus funds are a credit similar to the earned income tax credit or the additional child tax credit.  On the 2020 income tax return that will be prepared during the 2021 tax season, there likely will be a line entry under payments and refundable credits in which the stimulus credit can be calculated using the taxpayer’s 2020 income.  The stimulus check will be subtracted from the credit due on the return. If more credit is due, it will become part of a refund. If there is an overpayment through the stimulus check, the amount of the overpayment will not have to be returned to the IRS.

Will I receive a stimulus check if I owe debt to a federal or state agency?

Yes. People who owe money in any form to a federal or state agency, or a credit card company, will still get their stimulus check. Except, if a person owes past due child support payments and the state has reported that debt to the Treasury Department, then the individual will not get a stimulus check.

Does the money I get from the stimulus check affect my food stamps, Medicaid, or other public benefits?

No.  This payment does NOT count as income for eligibility or figuring out your benefit amount for any federally means tested program for twelve months.  This means that the check will not count as income or resources for SNAP (food stamps), TANF (PRC or OWF), Medicaid, or Social Security benefits for one year from the date that the payment is issued.  After one year, if you have not spent all of the payment, it could affect your benefits then.  Because the payment does not get counted for the first year, it will have no affect on your eligibility for benefits or on your benefit amount during this year.

 When will I receive my stimulus check?

The U.S. Treasury will begin providing stimulus checks to taxpayers during the first week of April. These will be direct deposited for anyone who provided banking information on their tax returns. For all others, the payments will be mailed.         

Can I track my payment?

Yes. Go to https://www.irs.gov/coronavirus/get-my-payment.

Where can I find more information?

The IRS will post all key information on www.IRS.gov/coronavirus as it becomes available.

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