The House on Friday passed a major economic relief bill to try and blunt the damage being done by the escalating coronavirus crisis. The legislation, which is expected to be approved by the House on Friday, includes direct cash payments — dubbed “recovery rebates” — to most Americans. The baseline check will be $1,200 per taxpayer, and adjusted from there based on your income, and another $500 for each dependent child.
The IRS will use your current tax form on file, which is probably 2018 for many people, but the 2019 submission for those of you who filed early. Those who have direct deposit information on file with the IRS will see the money sooner; those who do not will get checks mailed to them, so it could take weeks for the money to arrive.
How much money might you see from the bill? Here’s a look at what the legislation says:
Who is eligible?
- Any person who has a “work-eligible Social Security number" and is not listed as a dependent on another taxpayer’s return is eligible for the full rebate (more on that below) if his or her income is below $75,000, or $150,000 for married couples, according to a Senate analysis. That means that if you filed a tax return this year or last year, you’ll probably receive a rebate, assuming your income is below the caps.
Another bit of good news? Because the program is structured as a tax rebate, you won’t have to pay income tax on it.
How much could I receive?
- Single taxpayers making less than $75,000 will receive the full $1,200, with the amount decreasing for those above that before finally phasing out altogether at $99,000. According to the Senate analysis, your rebate will drop by $5 for each $100 you make above $75,000. The rebate thresholds are based on your adjusted gross income, meaning the total amount you make minus some payments like retirement contributions. (This amount can usually be found on your tax filings.)
- Married Americans with no children making less than $150,000 are expected see $2,400; however, they will receive no rebate if they make more than $198,000.
- Filers who are the heads of their household (usually single parents) and making up to $112,500 should see a full rebate. The complete phase out for heads of households depends on the number of children. According to the Senate analysis, heads of households with one child would see the rebate phased out entirely at $146,500.
- Parents will also receive an additional $500 for each child.
Confusing? Here are a few examples:
- If you’re a single person with no children and an adjusted income of $80,000, you’ll likely receive a rebate of $950.
- If you’re a married couple with three children and your joint adjusted income is $150,000, you should see $3,900.
- If you’re a single parent of two making an adjusted income of $110,000, you’ll likely receive $2,200.