Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
With the U.S. government announcing a $2 trillion stimulus package to combat the impacts of COVID-19, here’s what Americans should know to receive the payments. Using a special calculator, you can easily find out what you may get.
Last Friday, the House of Senate passed a $2 trillion stimulus bill signed by U.S. President Donald Trump. The bill aims to take corrective measures to stabilize the U.S. economy which has been severely impacted by the coronavirus pandemic.
Moreover, this plan comes with a one-time direct payment to the Americans. Last week, Treasury Secretary Steven Mnuchin said that these payments shall arrive within the next three weeks. As per the existing plan, individuals will get up to $1200 and $2400 for the married couples. Moreover, if you’re parents, you get $500 for every child.
But note that this stimulus comes with some income restrictions and caps. Thus, if you’re an individual earning $75,000 or a couple earning $150,000, you won’t get the full amount. Similarly, individuals earning above $99,000 are not eligible to get any payments.
Well, CNBC has partnered with Acorns to create a calculator on a personal finance website Grow. The calculator takes into account all factors like your annual income, filing status, and the number of kids you have.
Caveats that Americans Should Watch Out
While the government has released some good relief plans for Americans, there are a few caveats into it. Hence, one must remain watchful especially if the financial circumstances of the person have changed recently.
The stimulus gross checks will go out depending on the adjusted gross income for the 2019 tax year. However, if you haven’t yet filed your 2019 returns, the Treasury Department will check the 2018 return. Jeffrey Levine, director of advanced planning at Buckingham Wealth Partners in Long Island, said:
“It’s based on prior years’ incomes that may have nothing to do with their current situation. It’s a real issue. When you’re desperate for cash now, it does you no good to tell you, ‘Well, don’t worry, when you file your return next April, you’ll get it back”.
Thus, if you’re liable to any additional money at this time, it will come once you file your 2020 return. The payments shall be electronically made to the same accounts that you have authorized for previous funds. But if you have closed that account since the last tax return, there could be a problem.
In that case, a cheque shall be mailed to you at the mailing address. But if you have changed your residence this again could be an issue. Thus, one way to make sure that your contact information remains up-to-date is to file your 2019 tax returns as soon as possible.
In case you have a life-changing event after 2018 like having a child or income drop, you must get your tax return as soon as possible. The IRS has currently extended the deadline to file tax returns to July 15.