MINNEAPOLIS (WCCO) — On Friday, President Trump signed the CARES Act into law. One part of the historic stimulus package will be a direct payment of $1200 to most American adults.
Many WCCO viewers have questions about this portion of the legislation – like how much, when, and how? Good Questions.READ MORE: Missing Person: You Houa Thao
Who gets the money?
Most American adults will get a payment, unless they make too much money, are what’s called a “non-resident alien,” or are a dependent who can be claimed on someone else’s tax return. That third group includes a lot of college students and young adults who live with their parents.
It depends. If an individual’s gross adjusted income is less than $75,000/year, the payment is $1200. If an individual brings in between $75,000 and $99,000/year, the payment is reduced on a sliding scale. For individuals who earn more than $99,000, there is no payment.
If a married couple’s income in less than $150,000/year, the payment is $2400. For couple of who bring in between $150,000 and $198,000/year, the payment is reduced on a sliding scale. For couples who make more than $198,000, there is no payment.
For families with children, the limits are slightly higher. Families get an extra $500 for each child under 17.
How will it get to me?
According to Scott Kadrlik, director of taxation and managing partner at Meuwissen, Flygare, Kadrlik & Associates, P.A., the federal government will use a taxpayers 2019 direct deposit and income information if the taxpayer has filed this year. If not, the government will use the 2018 information.READ MORE: WCCO Saturday Night Interview: Mike Kojonen Talks Finances For Mother's Day
When will it arrive?
On Sunday, Treasure Secretary Steven Mnuchin told CBS’ Face the Nation, “We expect that within three weeks that people who have direct deposit information with us will see that direct deposit in their bank accounts.”
He went on to say the government will create a web-based system for people to enter their direct deposit information if they IRS doesn’t already have it. That website has not yet been created. For others who don’t have direct deposit, a check will be mailed, which experts say could take months.
“Three weeks is very optimistic,” said Leonard Burman, a tax expert with the Urban Institute. “The IRS has to write and test a program and make sure it can’t be hacked, as well as avoid fraud.”
Is the $1200 taxable? No
What if you owe back taxes? The stimulus check will not be reduced.
What about people on Social Security who don’t have to file a return? They’ll still get a a payment, but will need to fill a simple tax return to do it.
According to Burman, they’ll still get the money via direct deposit because the government has their information.
According to an IRS spokesperson, the IRS is “begging for patience” as the agency is still trying to figure out the details. There is a page on the IRS website where information will eventually be posted.MORE NEWS: Brother Fatally Shoots Sister Inside Chanhassen Home