The Coronavirus Aid, Relief, and Economic Security (CARES) Act

Theresa FerroneBlog

As of now, the stimulus coronavirus bill includes cash totaling $301 billion per the Tax Foundation (a think tank that has modeled the proposal). However, not everyone will be receiving a check due to two significant requirements: 1- a phase-out as income increases and 2- filing an income tax return.

At first glance, the plan’s provisions seem simple. Adults would get $1,200 each and $500 per child.

However, as income increases, the checks get smaller: The benefit would start decreasing at a rate of $5 for every additional $100 in income. The phaseout starts at $75,000 in adjusted gross income for singles, $112,500 for heads of household, and $150,000 for married couples filing jointly. It would be phased out entirely by $99,000 for singles and $198,000 for couples (with no children). For example, a single childless person with an AGI of $85,000 would receive $700 instead of the initial $1,200 because their high-income results in $500 of the benefit being phased out.

To receive a check of any amount, an income tax return must be filed. If you haven’t filed your 2019 tax return then the IRS will use your 2018 tax return to determine if your eligibility.

It is estimated that in 2019 about 43.8 percent of American “tax units” owed zero tax or expected a refund. Most of these Americans will file tax returns to get refunds, but millions of others (roughly 12 percent) don’t file their taxes for various reasons. The Senate bill as written would require these people to file 2019 returns to get their coronavirus checks.