As part of the coronavirus relief bill that was passed on Friday, March 27, 2020, the CARES Act, the government is issuing payments directly to individuals. It's like you're getting an additional tax refund on your 2019 taxes (or your 2018 taxes if you haven't filed for 2019 yet).
How much will I get?
The amount you will get is based on your Adjusted Gross Income (AGI) from your last tax filing (on your tax return Form 1040).
- Individual: $1,200 if your AGI is up to $75,000
- Head of Household: $1,200 if your AGI is up to $112,500
- Joint Return: $2,400 (per couple) if your joint AGI is up to $150,000
- Per Child: $500 additional payment per qualifying child
If your income is above the threshold, the payment is reduced by 5% of the amount of AGI in excess of the threshold, up to the point where the payment is $0.
To calculate your stimulus payment, you can enter your income here.
How will I get it?
If you authorized a direct deposit account on your 2018 or 2019 tax filing, the funds will be electronically sent to your account. If you did not have a direct deposit account authorized, a check will be sent to the address on your tax filing (or last known address).
If you filed a tax return for 2018 or 2019, the IRS will be launching a site on April 17th where you may:
- Check your payment status
- Confirm your payment type: direct deposit or check
- Enter your bank account information for direct deposit if the IRS doesn't have your direct deposit information and hasn't sent your payment yet
Once launched, it will be accessible here.
If you did not file a tax return in 2018 or 2019 you may enter your payment information here This includes people who receive veterans disability compensation, a pension, or survivor benefits from the Department of Veterans Affairs, or your income level does not require you to file a tax return.
If you haven't yet filed your 2019 taxes and something relevant to this has changed, you may want to consider filing your 2019 taxes as soon as you can. For example:
- If you didn't have a bank account - filing with a direct deposit account will allow for electronic fund transfer
- If you've moved - update the address the check is sent to
- If you've had a child - you'd get $500 more (if you qualify based on income)
You will also receive a notice confirming the payment sent to your last known mailing address within 15 days of the payment.
Other Self Employed Funding
If you're self-employed, work in the gig economy, or are an independent contractor you may also qualify for additional funding through loans with the Paycheck Protection Program (PPP) or an Economic Injury Disaster Loan (EIDL).
Loans typically mean there is an obligation to repay the money, with interest. Because of the pandemic, there are loans available now that you may not need to pay back under certain loan forgiveness options.
What is the Paycheck Protection Program? (PPP)
*The Congress has passed, and the President signed, an expansion of the Paycheck Protection Program on April 24, 2020 to provide an additional $310B to small businesses.*
The CARES Act introduced the Paycheck Protection Program. This program is aimed at small businesses, freelancers, self-employed people, and independent contractors. The goal of the program is to provide a loan to cover the costs of payroll and your business' rent and utilities.
You're eligible for forgiveness of 8 weeks of the costs for payroll and business rent and utilities.
The process for determining how much you may be eligible for is complex. If you believe this program may benefit you, contact a Small Business Administration (SBA) approved partner bank to learn more.
What is an Economic Injury Disaster Loan? (EIDL)
EIDL loans existed prior to the current crisis and are intended to help businesses, freelancers, self-employed people, and independent contractors who have been affected by a disaster. Because of the coronavirus, these loans have been opened up to the entire country.
These loans can be used to cover business expenses such as:
- Costs to meet payroll obligations; including paying yourself
- Business related rent or mortgage
- Operational expenses
There is an option to request an immediate grant of $10,000. As long as the proceeds are used for the above expenses, the $10,000 will not need to be paid back as part of the loan.
The application and eligibility process is complex, but an accountant or tax professional can help you navigate. The application is available with the Small Business Administration.