According to estimates by the Tax Policy Center, about 90% of Americans will be eligible to receive full or partial payments for coronavirus relief checks.
Here are 5 questions and answers.
How big will the checks be?
For individuals making less than $75,000 and married couples making less than $150,000, the checks will be $1,200 per adult and $500 per child under the age of 17. Those amounts phase out for taxpayers above the income thresholds, eventually zeroing out for individuals making more than $99,000 and married couples with no children making more than $198,000.
The original proposal from Senate Republicans would have phased in the check amounts, meaning some low-income households would not have qualified and others would have received a reduced amount. But the phase-in was not included in the final agreement, so low-income families are eligible to receive the maximum amount.
Who is eligible to receive a payment, and how is income calculated?
Most Americans qualify unless their income is too high, even if they don’t have any tax liability.
The phase-out of the check amount is based on adjusted gross income, which includes income from wages, investments, and retirement benefits and distributions.
Income amounts for the payments made this year are based on 2019 tax returns, or 2018 tax returns for people who haven’t filed their 2019 return yet. For those who haven’t filed a tax return in either year, the IRS can look at income information in Social Security benefit and Railroad Retirement benefit statements to determine eligibility.
The payments are essentially an advance on a credit against 2020 taxes. People who receive advance payments based on their 2018 or 2019 income but qualify for a bigger credit amount based on their income this year will receive the remainder of the credit amount to which they are entitled when they file their 2020 tax returns next year.
Recipients will not have to pay any money back to the government if their 2020 income is greater than their income in previous years, according to a Republican aide for the Senate Finance Committee.
Who is not eligible?
People who don’t have a Social Security number, nonresident aliens, and estates and trusts are not eligible. Additionally, a household would not receive money for an adult dependent, such as an elderly relative or an adult child with disabilities.
How will the money be sent?
The Treasury Department and the IRS would be responsible for distributing the money. The IRS can disburse rebates to people electronically to accounts authorized for tax refunds or other federal payments on or after Jan. 1, 2018.
Otherwise, recipients will likely receive their check in the mail. The Finance Committee aide said the IRS is looking to see if they can deliver the money through debit cards mailed to people instead of paper checks, which would get the funds to people faster.
The legislation directs the Treasury Department to work with the Social Security Administration and other agencies to conduct a public awareness campaign about the checks.