Coronavirus Stimulus Checks: Here’s Who’s Eligible For Relief Payment

If all the alarming coronavirus headlines have your anxiety at an all-time high, here’s some good news: A highly anticipated stimulus package meant to provide financial relief to consumers and businesses struggling in the wake of the COVID-19 pandemic is ready to be set in motion.

Though the details of the plan have yet to be finalized and voted on, Congress has essentially agreed on the major provisions. The CARES Act, which lawmakers spent the past several days hashing out, includes a historic $2 trillion in relief funds.

But the big question on most people’s minds is whether they qualify for a cut of the money. Here’s a look at the plan, who qualifies and when you can expect to get paid.

Do I qualify for a coronavirus relief check?

The amount of money you may receive as part of this stimulus package is based on your adjusted gross income. If you already filed your federal taxes for 2019 (the deadline was extended to July 15), eligibility will be based on your AGI from that tax return. If you haven’t filed yet, the IRS will rely on information from your 2018 return or the Social Security Administration to determine eligibility.

Here’s the bad news: Not everyone will qualify for a relief check.

The maximum amount you can receive is $1,200, or if married filing jointly, $2,400 per couple. That amount phases out for single filers with an AGI between $75,000 and $99,000, joint filers with an AGI between $150,000 and $198,000 and heads of household with an AGI between $112,500 and $146,500.

Those who qualify for the $1,200 credit will also receive an additional $500 for each qualifying dependent 16 years old or younger.

Those excluded from receiving a coronavirus relief check include nonresident aliens, taxpayers who can be claimed on someone else’s return as a dependent, and estates and trusts.

How will stimulus checks be paid out?

The stimulus money is technically a tax credit for 2020 that will be paid out, in advance, as soon as possible. “For the vast majority of Americans, no action on their part will be required in order to receive a rebate check as IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return,” a summary of the legislation says.

That means even though many taxpayers haven’t even filed their 2019 taxes yet, qualifying recipients will still receive their checks in the coming weeks ― that is, if they’re set up for direct deposit. According to Senate aides, you will receive your stimulus payment quickly (the president is pushing for a deadline of April 6) as long as you have bank account information on file with the IRS. If not, it could take up to four months to receive a physical check in the mail.

About half of households have filed their 2019 taxes already even though the deadline has been extended to July due to the pandemic, and for the other half, the IRS may use their 2018 data. But if they didn’t file that year either, they’ll need to file their 2019 return to get any money.

A problem with this policy is that some households may have been eligible based on their income from one year, but not the other, and will potentially miss out on relief.

Another potential problem is that millions of households don’t file tax returns even though they may have paid federal taxes through payroll contributions. There’s not much information about such households, but one study said roughly 8 million households paid taxes in 2003 and didn’t file 1040s, meaning they may have left refunds on the table.

Low-income households that do their taxes with the help of certified Volunteer Income Tax Assistance clinics will be out of luck, with the pandemic having shuttered those offices.

“This would have been an ideal circumstance for somebody to walk in to a VITA site,” said Howard Gleckman, a senior fellow with the Urban-Brookings Tax Policy Center. The best alternative may be to file for free online through one of the services linked on IRS.gov.

What else does the stimulus plan include?

In addition to direct payouts to American taxpayers, billions of dollars in benefits and loans will go to workers, businesses and hospitals to help them recover from the coronavirus fallout. There are numerous provisions outlined in the CARES Act; here’s a look at four major agreements included in the stimulus package.

1. Expanded unemployment benefits: The stimulus plan includes major upgrades to U.S. unemployment insurance, which Senate Minority Leader Chuck Schumer (D-N.Y.) described as “unemployment insurance on steroids.” The stimulus plan adds $600 per week on top of what unemployment programs normally pay, with that extra cash lasting four months. Benefits are also extended by 13 weeks for workers who run out of the standard 26 weeks of state benefits (some states offer less). The new plan also eliminates the waiting period to receive benefits and includes previously ineligible workers such as freelancers, contractors and furloughed employees.

2. Help for small businesses: The stimulus plan also provides $350 billion in funding for emergency loans to small businesses. Those that promise not to lay off employees or commit to rehiring employees that they let go will have some or all of their loans forgiven. These federally guaranteed loans will be issued by community banks and will be available through June 30.

3. Bailouts for major companies: A $500 billion fund will be created to provide distressed businesses with emergency loans, with a set amount to be set aside to help specific industries that were hit particularly hard by the pandemic, such as airlines, hotels and casinos. (Trump businesses are barred from receiving any of this relief.) This fund will be managed by the Treasury Department.

4. Funding to hospitals and communities: Finally, $130 billion will go to hospitals and health systems that are struggling in the wake of the pandemic. Another $150 billion will be provided to state and local governments to fund relief programs.