21st April, 2020
It’s been talked about for weeks: we all know that stimulus checks are being dispersed to Americans. But who qualifies? How will you get it? Will everyone get the full amount? Are the checks taxable? In this episode of Making Finance Fun, my goal is to answer all of your need-to-know questions. Check it out!
Outline of This Episode
- [0:00] Write a review for my free eBook!
- [1:10] What’s the deal with the stimulus checks?
- [2:25] Do you qualify for the tax credit?
- [6:45] Who doesn’t qualify and why
- [8:31] Are these stimulus checks taxable?
- [12:03] How you’ll get your check
- [14:21] Embrace this time the best you can
Who qualifies for the stimulus checks?
Here’s the breakdown:
- For single adults making less than $75,000: You get $1,200
- For married filing jointly and making under $150,000: You get $2,400
- Head of Household making less than $112,500: You get $1,200
- Each child under 17: You (the parent) get $500
They base this on your 2018 tax return—only if you haven’t yet filed for 2019. There IS a phase-out if you make over $75,000 (individual), $150,000 as a married couple, or $112,500 as head of household.
Who doesn’t qualify?
If you make MORE than $99,000 (individual), $198,000 filing jointly, or $136,500 as head of household, you will NOT get a stimulus check. The only saving grace is that you will STILL get $500 per each child under 17 in the household. Plus—there’s no limit on the number of children that you can claim.
Are these stimulus checks taxable?
The short and easy answer is no, they are NOT taxable. Why? Because these checks are considered a “refundable tax credit”. If you’re staring blankly and crickets are chirping in the background—you’re not alone. I get it, it’s 100% confusing. Here’s a simple way to break it down:
Let’s say you have a child and you’re filing your taxes. Once everything is processed, it’s calculated that you owe $10,000. But wait—because of a child tax credit, $2,000 of that amount is knocked off. So you only owe $8,000.
The stimulus checks are a one-time (currently) tax credit applied to your 2020 taxes that you’re getting in advance in the form of cash. It will not affect your 2020 tax filing in the slightest.
HOW and WHEN will you get the money?
If you have direct deposit on file with the IRS you’ll get your money via that route—and fairly quickly. As of the date this episode is airing (4/21/2020), I’ve heard of numerous people already receiving their credit.
If you typically receive your tax refund via check in the mail, things will be a little trickier for you. When I recorded this episode, the IRS stated they’d be creating a portal when you can give them your banking information. UPDATE: The link to the portal is below.
If you opt-out of giving the IRS your banking information, you’ll see your stimulus check far later, perhaps even July, with the latest projection into September. Either way, it will take longer than you expect if you wait for it to be mailed to you.
Resources & People Mentioned
- Business Insider Article
- Forbes Article on Stimulus Checks
- IRS information on Stimulus Checks
- IRS Portal
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