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Congress Passes the CARES Act in Response to the Coronavirus Pandemic

The Goal of the act is to stimulate and hopefully impede the tragic impact the Coronavirus has caused by providing over $2 Trillion into the economy. The Act was designed to to provide relief to healthcare industry, individuals and small businesses

These plans are complex and difficult to understand sometimes leaving individuals and small business owners with more questions than answers.

To help guide you during this time, we will be addressing the main provisions of the bill, beginning with recovery rebates for individuals.

The ACT provides approximately $500 billion in stimulus payment for most Americans. The IRS will be sending a check or direct depositing funds in the amount of $1,200 if single and $2,400 if married filing jointly. In addition, you will receive $500 for any dependent child under the age of 17. Below are answers to common questions about the stimulus checks.

How much will I actually receive?

The stimulus payments are subject to reduction if Adjusted Gross Income (AGI) on your 2019 tax return exceeds $75,000 for individuals, $112,500 for head of household and $150,000 for married couples. The payment is reduced by $5 for every $100 that AGI exceeds the applicable threshold. Individuals who earned more than $99,000, heads of household who earned more than $136,500, and couples who earned more than $198,000 will not receive a check. You are not eligible for the stimulus payment if you are a nonresident alien or if someone claims you as a dependent.

What if I have not filed my 2019 tax return?

If you have not yet filed your 2019 tax return, the IRS will utilize your 2018 return. If you receive Social Security benefits and have not filed tax returns, you do not have to file a return. You will be sent your stimulus check using the information that the Social Security Administration has on file. Those who do not receive Social Security benefits and also do not typically file taxes because their income is very low will need to file a 2019 tax return in order to receive a stimulus check. If you have filed your 2019 and/or 2018 tax returns, there is nothing you are required to do to receive your stimulus check.

Do I need to file my 2019 tax return immediately if I expect my AGI to be lower than 2018?

You have an opportunity to file 2019 if you expect to receive a larger stimulus check as a result. However, the stimulus checks act as an advance payment of a tax credit for the 2020 tax year. Therefore, the payment will be re-calculated based on your 2020 tax return. Any difference between that amount and the actual check you received will be applied upon completing your 2020 tax return.

When can I expect to receive my payment?

Per Treasury Secretary Steven Mnuchin, most people will get their payments within three weeks. You should receive a notice in the mail no later than a few weeks after the payment is sent, with information on where and in what form the payment was sent.

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