Economic impact payments: Who is eligible and how are they distributed?
COLUMBIA, Mo. (KMIZ)
Coronavirus economic impact payments have started going out to taxpayers across the country and many people have questions about those payments.
Who is eligible for payments?
According to the Internal Revenue Service, individuals whose annual income is less than $75,000 and married couples who filed their tax return jointly and make less than $150,000 a year are eligible for full payments. Individual heads of household are eligible if their income is less than $112,500.
Individuals are eligible for reduced payments if their income is between $75,000 and $99,000. Married couples filing jointly are eligible for reduced payments if their income is between $150,000 and $198,000. Reduced payments are also available for individual heads of household whose income is between $112,500 and $136,500.
Dependents, non-resident aliens and high-income filers are not eligible for payments.
How much money will you get?
The full payment for individuals and heads of households is $1,200. For married couples filing jointly, the full payment is $2,400.
Reduced payments are reduced by $5 for every $100 your income is over the full payment limit.
How will you receive the payment?
Anyone who has filed a 2018 or 2019 tax return and authorized direct deposit will receive the payments in that bank account. The first wave of payments were sent out Saturday, the IRS said.
Retirees who receive Social Security or railroad retirement benefits will also get the payments automatically.
According to the IRS website, guidance on how those who haven't filed a tax return can get their money will be available in mid-April.
Are there scams to watch out for?
The Better Business Bureau is warning taxpayers to be on the lookout for scams surrounding the economic impact payments.
The BBB says scammers are contacting taxpayers by phone and claiming they are government officials who need personal information to get taxpayers the payments.
The IRS says taxpayers who have filed returns for 2018 or 2019 do not need to do anything to receive the payments.
People who don't typically need to file a tax return can go to the IRS website to find if they need to take any additional action, but the BBB warns the government will never contact you by phone or email for personal or banking information.
Will the payments be taxed?
According to the CARES Act, the payments are a tax refund advance on an income tax credit for the 2020 tax year and will not be taxed.
The tax credit is new, meaning it will not affect the amount of a taxpayer's refund next year. The credit only exists for the purposes of administering the money.
If you have questions about the payments, you can visit irs.gov/coronavirus.
