By Ashley Burnside
In late December, lawmakers passed a coronavirus bailout package that provides significant economic relief to millions of workers and low-income people, even though it fails to meet high needs. Part of the package is a second round of stimulus payments. Despite the widespread coverage of these payments, many have questions about who is eligible and how to receive the payments. These payments also have different admission rules than those previously distributed. Here are ten pieces of important information about the second payment round:
1. Payments are $ 600 per Qualifying Adult ($ 1,200 for married taxpayers filing a joint tax return) and $ 600 per child under 17 years of age. Children aged 17 and over and other dependents, such as B. Permanently disabled children are not eligible for payment of $ 600. CLASP is disappointed that Congress did not include the adult dependent population in the stimulus payments. You don’t have to repay the IRS as the payments are an advance on a new 2020 tax credit. These payments do not affect eligibility for other tax credits.
2. You cannot receive payment of $ 600 if you are eligible for someone else’s dependency. You can be claimed as dependent on someone else based on your relationship with the applicant, your age, the fact that you lived with your parents for more than six months and whether you were financially independent for more than six months. This affects many full-time students under the age of 24. However, it is important to review the rules as not all college students are addicts. Learn more about whether or not a child qualifies as dependent. Individuals who were dependent in 2019 but not in 2020 can apply for both stimulus payments when filing their 2020 taxes.
3. You don’t have to have earned any income to qualify. Full payment is available to people with low to no income. Even if you make $ 0, you can still get paid in full. Payments expire on higher incomes, starting at $ 75,000 for single applicants. The exit rates are the same between the first and second payment rounds – $ 5 for every $ 100 you made above the Adjusted Gross Income (AGI) threshold – but since the payments are lower, some people have a partial payment in the first round this time will not get any.
4. You must have a Social Security number to receive payments, but mixed-immigrant families are now eligible. Unlike the first round of stimulus payments, other members of the household with a social security number can receive the payment as long as an adult in the household has a social security number. Mixed status families who did not receive the first incentive payment due to previous restrictions on spouses of individuals filing with Individual Tax Identification Numbers (ITINs) can now receive that payment retrospectively when they file their taxes in Spring 2021. Filers with ITINs are still not entitled to receive payment. And if both parents have ITINs, children with social security numbers are left with no payment. This will prevent about a million children who are citizens from receiving payments.
5. The IRS uses the information it already has on file from the first round of stimulus payments. The IRS delivers payments to the same places where it sent the first stimulus payments (mail or direct deposit). If, due to your circumstances, in 2020, e.g. If, for example, if you qualify for a higher payment based on your family size or income, you have the option of receiving that extra cash as a refund when you file your taxes in Spring 2021, but you won. You don’t have to owe any money if you would have qualified for a lower payment based on your 2020 income or your family situation. Social Security beneficiaries (both retirees and disabled) receive payments automatically, as do Supplemental Security Income (SSI) beneficiaries, railroad pensioners, and veterans’ benefit beneficiaries, although they may need to fill out a form to claim dependents.
6. Payments are made automatically by direct deposit if you have specified a bank account on your tax return. Checks will be sent if no account is given. Those who have made a direct deposit on file with the IRS will receive their payments faster than those who receive a check in the mail. This will create additional challenges for people without a permanent address. If you don’t have an address on file with the IRS, you can provide an address and apply for the short-term payment when you file your taxes in Spring 2021.
7. As with other tax refunds, these payments do not count toward eligibility for means tested programs and are not considered an asset for 12 months. This means the payments won’t jeopardize your participation in programs like Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and council housing. In addition, the discount checks are not considered taxable income.
8. Payment cannot be intercepted for overdue taxes, student loans, unemployment insurance overpayments, or child child support owed. We welcome the change in this round – as opposed to the first round – which prevents payments for child child support payments from being intercepted.
9. The IRS expects payments to be sent in the first two weeks of January by the end of December. If you’re eligible and don’t receive your payment, you can claim it when you file your 2020 taxes in early 2021. The IRS usually starts accepting returns in late January. This year, the tax form will include a section where applicants can apply for the refund credit. The IRS can also provide a form for individuals with no taxable income.
10. The obligation to file taxes in order to get payment will be an obstacle for many people. An estimated 12 million people had not applied for stimulus exams by October 2020, in large part because they traditionally did not file taxes and had to submit a separate form to be eligible. This is especially true given the fact that many VITA (Volunteer Income Tax Assistance) websites that offer help with tax preparation are closed due to the coronavirus pandemic. Public education campaigns and free online resources (such as the IRS Free File program) are vital to making these payments easier for people, especially those who have not previously filed taxes and have little or no income.