CARES Act Economic Stimulus Money: Frequently Asked Questions
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The federal government will issue stimulus checks directly to millions of Americans in an effort to help households stay afloat financially during the novel coronavirus (COVID-19) outbreak and the unprecedented economic harm it is causing the nation.
Even retired adults who collect Social Security benefits are eligible to receive a stimulus check (also called an Economic Impact Payment), which will be $1,200 for most people.
Here are some important details concerning eligibility for a stimulus check, how much you can expect to receive, when you will receive it and more.
What is the CARES Act?
The stimulus checks are part of the Coronavirus Aid, Relief and Economic Security (CARES) Act that was passed by Congress on March 27.
The $2 trillion package includes financial assistance for small businesses, large corporations and everyday Americans during a time of layoffs, furloughs, closures and general economic uncertainty as business are forced to close and workers are being asked to stay home to slow the spread of the virus.
Who is eligible for a stimulus check?
Americans who have a Social Security number and who aren’t listed as a dependent on anyone else’s tax return are eligible to receive a check.
If you have filed your return for 2019, the IRS will use your 2019 adjusted gross income (AGI) to determine the amount of money you qualify to receive in your stimulus check. If you have not yet filed for 2019, the IRS will use the income reported on your 2018 filing.
In order to receive a check, you must have a valid Social Security number. Non-residents who work in the U.S. without a green card are not eligible to receive a stimulus check.
Certain high income earners who don’t have children are also not eligible to receive a payment.
How much will you receive in your stimulus check?
The amount of money you receive depends on your income and filing status.
Here’s how it breaks down:
Americans who filed income taxes as individuals in 2018 or 2019 and had an adjusted gross income of up to $75,000 will receive a check for $1,200.
Married couples who filed joint tax returns in 2018 or 2019 and reported an income of up to $150,000 will receive $2,400 ($1,200 per person).
For filers with incomes above those amounts, the amount of the check will be gradually reduced by $250 per each additional $5,000 of reported income. For example, someone who filed 2019 income tax as an individual and reported an adjusted gross income of $85,000 will receive a $700 stimulus payment.
Individuals who earned an adjusted gross income of $99,000 as individuals or $198,000 as joint filers with no dependent children under age 17 will not receive a stimulus payment.
Head of household filers with a reported income below $122,500 qualify for a $1,200 check.
Parents will receive an additional $500 for each child under the age of 17.
How will you receive your stimulus money?
If you used direct deposit to either pay or receive tax money through a bank account for your most recent tax filing, your stimulus money will be directly deposited into your account.
Those who did not use direct deposit for their most recent tax filing will receive a paper check in the mail.
In the coming weeks, the Treasury Department will be developing an online portal where people can provide their banking information to the IRS online so that anyone with a bank account can receive their check via direct deposit.
When will you receive your stimulus check?
The distribution of money is set to begin in mid to late April. Those with direct deposit capabilities are likely to receive their money first, with mailed paper checks to follow.
What do you have to do to receive your check?
Most people will not have to do anything to receive their payment. The IRS will calculate the stimulus payment amount and automatically send the money to those who are eligible.
However, you should make sure your bank account information is accurate and matches the one that is on file with the IRS.
If you did not use direct deposit for your most recent filing, make sure your address is correct so that if a check is mailed, it will be sent to the correct address.
Can you get a stimulus check if you collect Social Security or disability income?
If you receive Social Security benefits or disability benefits, you may still eligible to receive a check, provided that your income falls within the eligibility requirements outlined above.
If you collect Social Security or disability income, you will not have to file a tax return in order to claim your check.
According to the Department of the Treasury, the IRS will use information from Form SSA-1099 and Form RRB-1099 to generate the stimulus checks for Social Security recipients who didn’t file 2018 or 2019 tax returns.
Under the original guidelines, Social Security recipients were mandated to file a simple tax return in order to receive a check, but this decision was later reversed.
What if you did not file a 2018 or 2019 tax return?
Some people are exempt from filing taxes for a variety of reasons, such as low-income taxpayers, senior citizens, Social Security recipients and some veterans and people with disabilities.
If you were not required to file a tax return for 2018 or 2019, you will need to file a simple tax return in order to receive your stimulus money UNLESS you collect Social Security.
If you are not exempt from filing a return but have not filed for 2018 or 2019, you will need to do so in order to receive your check.
The deadline to file taxes, including simple returns, has been extended to July 15, 2020, due to the COVID-19 outbreak. As long as you file a return before that date, you remain eligible to receive a stimulus check.
Will you have to pay taxes on the money you receive?
No, the stimulus checks are not counted as taxable income, and you will not have to pay taxes on it when you file your taxes next year.
However, the money is an advance refund on your 2020 tax return.
Will you still receive a check if your income tax refunds are being garnished because of a default loan?
Yes, the CARES Act is temporarily suspending efforts to garnish most tax refunds in order to repay debts.
What if you do not receive a check?
You should receive a paper notice in the mail approximately 2-3 weeks after your payment has been disbursed.
The notice will contain information about where the payment was made and in what form (paper check or direct deposit), along with some contact information for the IRS if you did not receive your check.
Where can you get more information?
For help or further information, visit the dedicated coronavirus tax relief page set up by the IRS.
Christian Worstell is a health care and policy writer for MedicareSupplement.com. He has written hundreds of articles helping people better understand their Medicare coverage options.