To help ease the financial effects of the COVID-19 pandemic, the federal government is planning to send stimulus checks to all taxpayers in the coming weeks.
For your planning purposes, we wanted to share with you their guidelines for determining eligibility. It is important to note that children 17 and older who are claimed by their parents or elderly adults claimed as dependents on a tax return are not eligible for the $500 payments.
- Individuals with an adjusted gross income (AGI) up to $75,000 or married couples filing jointly with an AGI up to $150,000 will receive the full payment of up to $1,200 per person and $500 for each child under 17.
- Tax filers with incomes above those amounts will see their payment amount reduced by $5 for each $100 they are above the $75,000/$150,000 thresholds.
- Social Security recipients and railroad retirees who aren’t required to file annual returns are still eligible to receive payments.
This is an advance payment of a 2020 income tax credit. Therefore, those whose AGI in 2020 ends up being lower than their last filed tax return, or those who had a child in 2020, will receive a credit for the difference on their 2020 income tax return. Those who receive a larger credit than they would be entitled to in 2020 will not have to repay the difference.