Prepared by Bijan Vafaei, April 2020
Although some people, such as people in the higher income brackets, will not qualify for an Economic Impact Payment, most people are eligible. Millions of Americans have already received their Economic Impact Payments authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Eligible individuals will receive $1,200. Two eligible individuals filing a joint return (married couple filing jointly) will receive $2,400. You will receive an additional $500 payment for each qualifying child you claimed on your tax return.
A lot of processes in Economic Impact Payment are still unclear at this time, you may wish to keep those funds separate so that they are available to you if/when the IRS requests their return. This is an unofficial and summarized guidance based on my personal understanding of the IRS's guidance under the CARES Act website.
You do NOT need to pay it back. It is NOT a loan.
You do NOT pay tax on it. CARES Act payments are NOT taxable.
The money is yours, No take back.
Protect your funds from fraud and scam activities. See Note 1 about the Tax Scams and Consumer Alerts.
General Eligibility: U.S. Citizens, U.S. Permanent Residents, U.S. Resident Taxpayers (IRS Definition) are eligible to receive the payments. See Note 2 about the General Eligibility.
Eligibility of F-1 and J-1 Students: It depends on the year the student entered the U.S. Students entered the US prior to 2015 are eligible to receive the payments. See Note 3 about the Eligibility of Students.
More information is available on the IRS Website here:
Note 1 about the Tax Scams/Consumer Alerts:
The IRS DOES NOT contact taxpayers by email, text messages or social media channels to request personal or financial information.
The IRS NEVER calls and demands immediate pay back over the phone.
The IRS NEVER tries to threaten or intimidate you, demand payment with a prepaid debit card, or ask for your credit card or debit card number over the phone.
The IRS NEVER threatens to call the police or immigration agents if you don’t pay.
Note 2 about the General Eligibility:
You may be eligible to receive a Payment if you:
Are a U.S. citizen or U.S. resident alien;
Cannot be claimed as a dependent on someone else’s return;
Have a Social Security number (SSN) that is valid for employment (valid SSN); and;
Have adjusted gross income below an amount based on your filing status and the number of your qualifying children.
Individuals who qualify as residents for U.S. tax purposes (along with U.S. citizens and U.S. permanent residents) are legally able to file a resident tax return. F-1 and J-1 students qualify as residents for U.S. tax purposes after 5 years in the U.S. If you are an F-1 or J-1 student who entered the U.S. in 2014 or earlier you are considered a resident for tax purposes. Students who have been here since 2014 who correctly filed a resident tax return on Form 1040, 1040A or 1040EZ are eligible for the additional $1,200 payment unless they are claimed as a dependent on someone else’s US. tax return. The IRS will deposit the funds into the bank account you used on your most recent tax return. No action is required on your part.
Note 3 about the Eligibility of Students:
If you are an F-1 or J-1 student who arrived in the U.S. in 2015 or later you are a nonresident for tax purposes and are not eligible for the additional $1,200 payment. If you filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019, you are not eligible for the additional $1,200 payment.
U.S. resident aliens with a valid SSN are eligible for the Payment if they can’t be claimed as a dependent of another taxpayer. Determine if you are considered a U.S. resident alien at Aliens – Which Form to File. If you are eligible to file Form 1040 or Form 1040-SR like U.S. citizens for 2019, including by filing a joint federal tax return with a U.S. citizen or U.S. resident alien spouse, file Form 1040 or Form 1040-SR with the IRS for 2019 even if your income isn’t enough to require you to file a tax return. You don’t need to take any action if you already filed a Form 1040 or Form 1040-SR for 2019 or 2018.
If you are considered a U.S. resident alien for 2020 but not for 2019, you can claim the Payment when you file Form 1040 or Form 1040-SR with the IRS for tax year 2020.
If you are considered a U.S. resident alien for 2019 but not for 2020, you won’t be required to repay the Payment we paid in 2020 based on your Form 1040 or Form 1040-SR for tax year 2019.
Note 4 about Who is Not Eligible:
Taxpayers likely won't qualify for an Economic Impact Payment if any of the following apply:
Your adjusted gross income is greater than
$99,000 if your filing status was single or married filing separately
$136,500 for head of household
$198,000 if your filing status was married filing jointly
You can be claimed as a dependent on someone else’s return. For example, this would include a child, student or older dependent who can be claimed on a parent’s return.
You do not have a valid Social Security number.
You are a nonresident alien.
You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019
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