More questions and answers about the coronavirus checks

Americans are keenly interested in the cash payments included in the coronavirus relief bill that is soon expected to become law.

Under the bill, millions of households will receive rebates in the amount of $1,200 per adult and $500 per child. The amounts phase out for individuals making more than $75,000 and married couples making more than $150,000.

The Senate passed the bill late Wednesday, and the House is expected to pass it Friday. Trump is expected to sign the legislation.

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The Joint Committee on Taxation estimated in an analysis released Thursday that the rebates will reduce federal revenue by $292 billion over a decade, with all of the revenue loss occurring in fiscal years 2020 and 2021.

Many people are facing financial challenges as a result of the coronavirus and have questions about whether and how they will receive a check. 

The Hill answered several frequently asked questions about the checks on Wednesday. Here are answers to additional questions.

Will people have to pay taxes on the money when they file their tax returns next year?

No. The money is not counted as taxable income. It’s treated as a fully refundable tax credit against your 2020 taxes, meaning that you get the money even if you don’t have any tax liability.

Can people get checks even if they haven’t filed a tax return in recent years?

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In cases where people haven’t filed tax returns but receive Social Security benefits or railroad retirement benefits, the IRS can look at statements about those benefits to help get the checks to those people.

For people who have not filed a 2018 or 2019 tax return and do not receive Social Security or railroad retirement benefits, there is an incentive to promptly file a tax return to ensure that the IRS can reach them to distribute the money to them this year. 

People who do not file tax returns are typically low-income. For example, the IRS requires married couples with both spouses under 65 to file returns for 2019 if their gross income was at least $24,400. That threshold is raised to $27,000 in cases where both spouses were 65 or older. Social Security benefits often aren’t included in gross income.

Are immigrants eligible to receive the checks?

They are if they have a Social Security number. A Republican aide to the Senate Finance Committee noted in a call with reporters Wednesday that Green Card holders qualify for work-eligible Social Security numbers.

Are college students eligible to receive the checks?

If college students are at least 17 years old and are claimed as a dependent on their parents’ return, their family would not receive any payment amount for them. A college student who filed his or her own return and was not claimed as a dependent on his or her parents’ return would qualify for the rebates.

I made $85,000 last year. How much money will I receive?

For a single tax filer, the rebate amount reduces by $5 for every $100 of income over $75,000. So a single person with no children who had adjusted gross income of $85,000 in 2019, and has already filed a 2019 tax return, would receive $700.

Keep in mind that phase-out of the credit is based on people’s adjusted gross income, which does not include income put into pre-tax accounts such as traditional 401(k)s. As a result, someone with an annual salary of $85,000 and no other income could have adjusted gross income of less than $85,000.

How can people who recently moved ensure they get their checks?

If you received a refund in 2018 or 2019 via direct deposit to your bank account, and you did not change your bank account when you moved, you should be able to receive your rebate via direct deposit.

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Tax experts said that they think it would be helpful for the IRS to provide guidance for taxpayers who have moved or have new bank accounts since they filed their most recent tax return.

Under the bill, the IRS has to send a notice to a taxpayer’s last known address within 15 days of distributing a payment. The notice should provide information about the payment amount, the method used to make the payment and an IRS phone number to report failures to receive the payment.

How are check amounts impacted if someone has a child in 2020?

Tax experts said that since advanced payment amounts are based on taxpayers’ 2018 or 2019 returns, people who have children in 2020 would receive payments this year that don't take into account the new children. However, the rebates are credits against 2020 taxes, so new parents will get the additional credit reflecting their children when they file their 2020 tax returns next year.

What are areas where IRS guidance might be helpful?

The coronavirus relief bill is not yet law, and the IRS has yet to provide information about how it plans to implement the provision about the rebates. On the IRS’s coronavirus landing page, the agency is telling people not to call it right now and to check back for updates at a later point.

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Tax experts are hoping that the IRS issues guidance to clarify issues about eligibility when taxpayers’ situations differ in 2018, 2019 and 2020, as well as guidance about which nonfilers now need to submit a tax return in order to receive a payment.