The harsh economic consequences of the COVID-19 pandemic and the widespread shutdowns needed to contain it are starting to set in.
More than 30 million Americans have filed for unemployment and more will. In an effort to keep financially distressed Americans afloat, Congress has responded with a $2 trillion stimulus package, known as the Coronavirus Aid, Relief and Economy Security (CARES) Act.
While most individuals will get a stimulus payment provided by the CARES Act (those $1,200 maximum checks you’ve been hearing about), you might be surprised if you find yourself without one. Here are five reason why you might not get a stimulus payment:
1. Your adjusted gross income is too high
There are three dollar figures to be aware of in terms of the stimulus payments: $1,200 will be given to individual taxpayers, $2,400 will go to married couples filing jointly, and families will receive an additional $500 per qualifying child under the age of 17. Those numbers only apply to certain incomes, though. Individuals with adjusted gross income (AGI) up to $75,000, married couples filing jointly with AGI up to $150,000 and heads of households with AGI up to $112,500 will receive the full amount of stimulus payments. Keep in mind that AGI will be based on your 2019 tax return, or 2018 if you haven’t filed yet. (You can see advice here on whether it makes sense to rush to file your 2019 return.)
Groups that make more than those AGI figures, however, start falling into the “phase out” category, which means the stimulus amount granted goes down as AGI goes up. Individuals and households will be paid $5 less per every $100 they make over the limits. The total phase out amounts, meaning the AGI is too much to qualify for a stimulus check, are $99,000 for single filers and $198,000 for married couples filing jointly, or $136,500 for heads of households.
To give you an idea of how the phase out works, here are estimates of stimulus amounts for different filing statuses and income amounts. Keep in mind that each qualifying child under the age of 17 will add an additional $500 to these stimulus amounts. The payment for children begins to phase out (at the same $5 per $100 of income), after the payment to adults has completely phased out.
- $80,000 AGI: $950 stimulus
- $85,000 AGI: $700 stimulus
- $90,000 AGI: $450 stimulus
Married filing jointly
- $160,000 AGI: $1,900 stimulus
- $170,000 AGI: $1,400 stimulus
- $190,000 AGI: $400
Head of Household:
- $115,000 AGI: $1,075 stimulus
- $120,000 AGI: $825 stimulus
- $130,000 AGI: $325 stimulus
If you don’t want to do the math yourself to estimate how much your stimulus amount might be, the Forbes’ Stimulus Check Calculator will calculate it for you. The only information you’ll need to provide is your filing status, income and child how many child dependents you claimed.
2. You’re unemployed now, but your previous tax returns make you ineligible
If you already filed your 2019 taxes and are ineligible because you made too much on them, but now are unemployed, you’ll probably reeling at the idea of not receiving aid in your time of need. It’s frustrating, but there is a provision in the stimulus bill that will ensure you get a stimulus check—it just won’t be immediate.
If your income suddenly drops this year due to unemployment, or much lower hours or gigs than you worked the year prior, you’ll be able to claim the stimulus on your 2020 tax return. That means you’ll have to wait until next year to receive it.
That’s not necessarily helpful for individuals who need cash now. If you need immediate financial assistance, some banks are offering financial assistance to customers experiencing financial hardship due to COVID-19, including payment arrangement programs, mortgage relief and more. Additionally, the Department of Education is suspending federal student loan payments, without interest, until the end of September.
These relief systems won’t put money in your pocket now. But they could keep you afloat in the meantime while you search for a work from home job or gig, since most of the country is ordered to shelter in place right now, or successfully file for unemployment.
Another thing to keep in mind: while the stimulus checks are technically a tax credit you’re being paid in 2020. If you miraculously make more money this year and end up in the phase-out category, it appears you won’t have to return the money to the government.
3. You missed the deadline to update your bank account information
This doesn’t mean you won’t ever get a payment, considering you check all of the other boxes to qualify. But it could explain why it’s taking much longer to receive the stimulus money you’re entitled to.
Stimulus checks will be direct deposited into the bank account listed on 2019 tax returns (or 2018, if you have yet to file for last year). If no bank account is listed on either return, the IRS will send a physical check to your most recent address on file—and some experts estimate it could take months for physical checks to make it to households.
The IRS launched an online tool for individuals to update their banking account information, called the “Get My Payment” tool. However, the deadline for individuals to add their bank account information is Wednesday, May 13 at 12 p.m. ET. If you don’t update or add your banking information, your check will be sent to whatever address is on file with the IRS.
By law, the Treasury must send a notice of payment, by mail, to that last known address. The notice will include a phone number at the IRS to contact if you didn’t receive the payment. This could be helpful for individuals who live at the same address listed on their last tax return but have new banking information and don’t update it in the IRS portal. But if your payment ends up going missing—meaning you no longer have access to whatever address is on file with the IRS—here’s what you can do.
4. You’re a college student
One major caveat of the stimulus checks are that anyone categorized as a dependent won’t qualify for payment. This will force many college students to be determined as ineligible for a stimulus check.
Who is a dependent? By law, a child under the age of 19 at the end of the year, who lives with you for more than half of the year and has not provided more than half of his or her own support for the year, qualifies as your dependent, so long as he or she doesn’t file a joint return for the year. But a full time student under the age of 24 is also your dependent, even if they live mostly at college—-if you provide more than half their support and they aren’t married and filing a joint return.
Some might think that they can get around this no-stimulus-for-dependents over 17 provision by asking their parents not to claim them on their taxes, if they haven’t already. No dice. As long as a student is a dependent under the legal definition in the law, they still won’t qualify for a stimulus check, even if their parents don’t actually claim them.
If the student falls out of the legal definition of a dependent, they should consider filing a tax return with the IRS even if they have no taxable income to be eligible for a stimulus check.
5. You owe money
Owing money is an uncomfortable situation. Most of the time, the government will come after debtors to offset money owed. Stimulus checks can be taken from you to cover past due debt including child support, bank debts and private debt collections (though some states are now implementing their own rules to prevent private debt collectors from seizing stimulus checks). Past-due taxes, defaulted student loans and anything handled in bankruptcy proceedings cannot be situations where your stimulus check will be used as an offset.
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