Written by David Dennard
In response to the unprecedented challenges facing many Americans, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) includes a credit to be paid directly to individuals. This will be provided to most Americans with a Social Security Number and will not be taxable.
Recovery Rebate Amount
If a taxpayer is ineligible for the rebate based on their 2019 (or 2018) return, but becomes eligible based on their income for 2020, they will receive the rebate when filing the 2020 return. Luckily, if the opposite occurs where a taxpayer receives the rebate based on the 2019 return but has a larger income in 2020, there is no repayment of the rebate.
How is the Rebate Calculated?
The rebate is calculated based on Adjusted Gross Income (AGI) and on the 2019 individual tax return. If the 2019 return has not been filed yet, the 2018 return will be used.
Social Security recipients who normally do not file are not required to file in order to receive the rebate. The IRS is utilizing information on forms received from the Social Security administration to determine to whom to send rebates.
Low income taxpayers, senior citizens, or other taxpayers normally not required to file may need to file in order to receive the rebate.
How and When will I get my Rebate?
The rebate will be paid electronically based on the bank information on file with the Internal Revenue Service. If the service does not have access to a taxpayer’s banking information, a paper check will be mailed to the address on their tax return. In the event, for whatever reason, a taxpayer does not receive their rebate, they may make a claim on their 2020 tax return filed in 2021.
U.S. Treasury Secretary, Steve Mnuchin, expects that payments will be issued within three weeks. Further, President Trump expects, by April 6th , rebates will begin disbursement. The IRS has not released any information regarding a specific date for check disbursement.