*This post may contain affiliate links, please see my disclosure
UPDATE 03/26/20: This bill has been approved by Congress, and expected to be passed into law this week. New details below have been updated to reflect the current bill, and will be updated daily as this is passed into law.
Senate Republicans unveiled an “Economic Rescue Plan” that would send American taxpayers $1,200 checks. It will also provide low-cost loans to corporations and small business struggling during this outbreak.
Taxpayers earning up to $75,000 ($150,000 for married couples) per year would receive a $1,200 stimulus check, and payments go LOWER for those earning $76,000 – $99,000 ($198k for married couples) per year. If your tax filing status is Head of Household, the income limit is $112,500.
It also provides $500 per qualifying child (16 years old and under).
The NEW copy of the bill can be found HERE.
|BEST PLACE TO PUT YOUR STIMULUS CASH?|
The CIT Bank Money Market Account is now offering an industry-leading 1.80% interest rate! Build your emergency fund and earn more!
Who Gets A Stimulus Check?
If you are under the adjust gross income limits on your 2019 tax return (or 2018 if no 2019 return filed yet), you would receive a check. You would also receive additional money if you have qualifying children (16 years old and under).
NEW: If you do NOT qualify for a check based on 2018/2019 income, but your income drops in 2020 below the thresholds, you are eligible to receive the rebate amount on your 2020 tax return.
What Is My Adjust Gross Income?
Adjusted Gross Income is your income after a few “above the line” deductions.
Jake, seriously, no one knows what the means…???
Ok, ok, fine. See the below screenshot. You can look at your 2018 (or 2019, if already filed) tax return, and on the 1040 tax form, it’s Line 8b.
What Are the Income Limits To Get A Stimulus Check?
Here are the specific income qualifications:
- Income details based on 2019 tax return (or 2018 if no 2019 return filed yet)
- If you are ABOVE the threshold in 2018/2019, but BELOW in 2020, you may be eligible for payment on your 2020 tax refund (more details later in this post).
- Maximum Adjust Gross Income for individuals of $75,000 to get full check
- Maximum Adjust Gross Income for married-filing-joint couples of $150,000 to get full check
- Maximum Adjust Gross Income for Head of Household of $112,500 to get full check
- Check reduced by 5% of amount of income exceeding $75,000 ($150,000 married-filing-joint, $112,500 Head of Household)
- Meaning $50 less for every $1,000 over
If you earn $99,000 or more ($198,000 married-filing-joint), you would NOT receive the individual stimulus check. If you earn over $136,500 as Head of Household, you would NOT receive a check.
If you have a qualifying child (16 years old and under) , you will also receive additional money per child.
Who Doesn’t Get A Check?
Here’s a quick list of a few people that may not receive a stimulus check:
- If your AGI is above the phaseout amount (but may still qualify for tax credit based on 2020 AGI)
- If you are 17 or older, but claimed as a dependent by another on their 2018 or 2019 tax returns
- If you don’t have a social security number, or adoption identification number (except military)
- If your address or direct deposit info from your 2018 or 2019 tax return are inaccurate, the payment may not reach you
2020 Stimulus Check Cheat Sheets
Use the below table to see what your Estimate Stimulus Check will be.
Scroll down to find your check amount!
What If I Made Too Much Income, Can I Still Get A Stimulus Payment?
Yes. The latest bill allows taxpayers who are phased out due to earning too much money in 2018 or 2019 to be eligible if their earnings substantially decrease in 2020. Here’s how it works:
- If you earned more than $99,000 adjusted gross income ($198,000 for married-filing-joint, or $136,500 for Head of Household) in 2018 / 2019, then you will NOT receive a check right now.
- BUT, if your income in 2020 drops below the threshold, you are eligible to receive stimulus payment as part of your TAX REFUND on your 2020 tax return,
Example: Joe’s adjusted gross income is $100,000 in 2019, and gets no check. But in 2020, his AGI is under $75,000. He is entitled to receive the $1,200 rebate in his 2020 tax refund.
How Much Money Will I Get?
The current proposal gives specific amounts per qualifying taxpayer. Here’s a quick summary
- $1,200 check sent to individual taxpayers who meet the income qualifications
- $2,400 check sent to married-filing-joint couples who meet the income qualifications
- $500 additional for each qualifying child (16 years old and under) in the household
If you earn over the income phaseout amount, you will receive $50 less per $1,000 AGI over.
Example; If your adjusted gross income for 2019 was $80,000, you are $5,000 over the income phaseout. That means your check would be reduced by $250. You would receive a $950 stimulus check.
Example Total Check
We are a family of 5, married-filing-joint and meet the income qualifications for a full check. We also have 3 qualifying children (16 years old and under) .
We would expect a $3,900 check from this stimulus.
$2,400 + $500 per child (3) = $3,900
When Will I Get My Stimulus Check?
Those qualifying families who expect to receive a check could start getting checks once the bill is passed as law. There are no hard dates on when these will get sent out YET, but Trump’s team would like to start sending out money as soon as 3 weeks after the law is passed.
Payment will be in the form of a check. But you have received direct deposit on your past tax returns, the IRS will send the payment via direct deposit.
Is This A One-Time Payment Or…?
As it stands, this is currently a one-time payment. Trump as stated on numerous occasions that this may NOT be the only check that is sent out, but that is still too be seen.
Do I Have To Pay Back My Stimulus Check?
The latest bill has changed the wording of the stimulus payments, and it is now considered a “rebate.” Essentially it’s getting a a credit against your tax liability for 2020.
Jake, my brain hurts already, can you just tell me what that means?
No, you don’t have to pay back your stimulus check. But here’s why (if you like details):
- The bill says this rebate is a credit against your taxes owed. But what if you didn’t earn much and don’t owe taxes? All good, it’s a refundable credit, which means you get it whether you owe taxes or not.
- The bill says if you get a stimulus rebate based on 2018/2019 income, but then you earn MORE than the phaseout amount in 2020, you don’t have to pay it back, the rebate will be FORGIVEN.
Example: Joe earned $50,000 in 2019, and gets a $1,200 rebate check. But in 2020, he earns $100,000, which would disqualify him from the rebate. He does NOT have to pay back the $1,200, and the rebate payment is essentially “forgiven.”
Do I Get A Check If I’m Retired Or On Social Security?
Yes. You will still be eligible to receive a stimulus check. Adjusted Gross Income will be based on your 2019 tax return (or 2018 if no 2019 return filed yet). If you have not filed a return for either year, the rebate amount will be determined based on Social Security Administration records.
What Should I Do With The Money?
The money received from this stimulus is meant to help you through the financial turmoil current happening. With millions seeing their income drop (many of them to $0), this money should be reserved for essential spending if you are in financial distress.
Here are a few things I recommend doing with your stimulus money:
Get On A Written Budget
Yes, this money is much needed during this time of crisis, but long-term, it doesn’t mean a thing unless you have a plan for your money.
p.s. if you’re ready to make a complete money plan, our 40-page Budget Binder is only $9 until this health crisis slows down.
Pay For Immediate Needs
The most important needs right now are food, shelter and utilities. You may also need a few household items to help through the current lockdowns. Take care of yourself and your family first. And remember, there are options available for financial help on my COVID-19 Financial Resources page.
Add To Your Emergency Fund
If you can pay for your immediate needs, but don’t have 3 to 6 months of expenses saved in an Emergency Fund, these funds can be added to help you weather the current health crisis.
We currently recommend the CIT Bank Money Market account to keep your money safe (and earning 1.8% interest!)
Pay Off Debt
If you are financially secure and have taken care of your immediate priorities, you can now look at paying down some of your debt. I recommend using the Debt Snowball Method. You may also consider paying down your Federal Student Loans, as they are currently suspending interest, and your payments would all go toward principal.
If you still have income and an emergency fund, you may consider putting these extra funds into something like a Roth IRA. You can read more details on how I recommend investing in my Personal Finance 101 post.
If you are unsure what you should be doing with your money right now, I also recommend checking out my 7 Steps To Creating An Emergency Budget which can help your dollars stretch further during this health and financial crisis.
If you are in a good financial position, you may consider donating these funds to those in need. Some have suggested buying gifts cards to local businesses to use later, which gives them much-needed revenue to stay afloat.
There are also many local community relief funds opening up everywhere you can give to. Or simply help those around you who are struggling to put food on the table or pay their bills.
Find a cause, and give, it will have a PROFOUND IMPACT to those in need around you.
Get Started On A Budget (Free Template!)
This money may NOT be enough to help you through the next few months during this national state of emergency. You cannot control what the market or virus are doing, but you CAN control the choices you make during this critical time.
Make sure you grab a copy of my FREE Budget Template and put a money plan in place!