{"id":19347,"date":"2020-04-02T08:00:33","date_gmt":"2020-04-02T13:00:33","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=19347"},"modified":"2021-01-11T14:51:54","modified_gmt":"2021-01-11T20:51:54","slug":"economic-impact-payments-what-your-clients-need-to-know","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/economic-impact-payments-what-your-clients-need-to-know\/","title":{"rendered":"The first Economic Impact Payment: what your clients need to know"},"content":{"rendered":"

This content is for the first stimulus relief package, The Coronavirus Aid, Relief and Economic Security Act (CARES Act), which was signed into law in March 2020. For information on the second stimulus relief package, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, which was signed into law on Dec. 27, 2020, please visit our post <\/i>here<\/i><\/a>.<\/i><\/p>\n

In April 2020, the U.S. Treasury Department and the IRS announced that the distribution of Economic Impact Payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.<\/p>\n

Here are some FAQs you can review and communicate with your clients:<\/p>\n

Who is eligible for the Economic Impact Payment? <\/b>Tax filers with adjusted gross income up to $75,000 for individuals, and up to $150,000 for married couples filing joint returns, will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000\/$150,000 thresholds. Single filers with income exceeding $99,000, and $198,000 for joint filers with no children, are not eligible.<\/p>\n

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.<\/p>\n

How will the IRS know where to send my payment?\u00a0<\/b>The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.<\/p>\n

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.<\/p>\n

The IRS does not have my direct deposit information. What can I do?\u00a0<\/b>In the coming weeks, the U.S. Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.<\/p>\n

I am not typically required to file a tax return. Can I still receive my payment? \u00a0<\/b>Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.<\/p>\n

How can I file the tax return needed to receive my economic impact payment? <\/b>The IRS coronavirus website<\/a>\u00a0will soon provide information instructing people in these groups on how to file a 2019 tax return with simple but necessary information, including their filing status, number of dependents and direct deposit bank account information.<\/p>\n

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?<\/b>\u00a0\u00a0Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.<\/p>\n

I need to file a tax return. How long are the economic impact payments available?\u00a0<\/b>For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.<\/p>\n

Where can I get more information? <\/b>In addition to the\u00a0IRS coronavirus website<\/a>, visit the Intuit Accountant and Tax Professional COVID-19 Resource Center<\/a>.<\/p>\n

Update from the IRS (5\/29\/2020)<\/strong><\/p>\n

The IRS announced that some economic stimulus payments are being sent by prepaid debit card instead of paper check. The debit cards arrive in a plain envelope from \u201cMoney Network Cardholder Services.\u201d<\/p>\n

Deciding which taxpayers received a debit card was made by the Bureau of the Fiscal Service, a part of the Treasury Department that works with the IRS to handle distribution of the payments. Those who receive their economic impact payment by prepaid debit card can do the following without any fees:<\/p>\n