The COVID-19 pandemic has not only made millions of Americans sick and cost hundreds thousands of people their lives, it has made financial life difficult for many families. Families are facing lost or reduced income due to the pandemic or the need to work less to support distance learning, and are eagerly hoping for more financial support from the government in the form of stimulus checks.
The first round of stimulus checks were sent out in April 2020 and some families have been hopeful for a second or even third round of checks for 2021. Keeping up with the latest information on stimulus checks can be overwhelming, so we're breaking down the top 15 things families need to know about government-issued stimulus checks. Read on for the latest information for families of all income levels.
Who Is Getting This Stimulus Check?
Families that got the first stimulus payment are in luck! The second round of stimulus payments uses the same criteria as the first round, so those who got one in 2020 should plan to get a second one soon, if not already.
What About People Who Didn't File Taxes?
Not everyone has to file taxes every year, but those who didn't file in 2019 won't automatically get a stimulus payment, but, they may have options for the second payment. The best bet is to check the IRS website for up-to-date guidance.
How Much Are the Stimulus Payments?
One of the biggest questions for round two of the stimulus checks is "How much will they be?" After much debate and some politicians calling for checks of $2,000, Congress ultimately passed a bill allowing for a base rate $600 per eligible person for this round of stimulus money. There is still debate on what President-elect Joe Biden's Cabinet may do.
Are All Families Eligible?
Not all families will be eligible to get a stimulus check. According to the IRS, families with with a combined adjusted gross income of more than $150,000 on their 2019 taxes will not be eligible for a $600 payment. People who are not legal residents or who can be claimed as a dependent by someone else are also not eligible.
Do Kids Qualify?
Here's some good news! Children under the age of 17 do qualify for a $600 payment if their parents qualify for the stimulus check. All of the funds for a family will arrive in one lump sum, so no need to worry about bank accounts or checks for the kiddos.
When Will the Money Come?
Some families may already received (and let's be real, spent) their stimulus money. The IRS began making stimulus payments on December 30, 2020 and has until January 15, 2021 to mail out paper checks to eligible families.
Do Families Have To Apply To Get the Money?
No application for stimulus funds is required, which means that at least one part of this whole pandemic situation is easy! The IRS will automatically identify eligible families.
Checking the Status of a Stimulus Check
This whole thing might feel overwhelmingly confusing. Families that have not already seen their stimulus payments arrive at the bank can check on the status of their payment through the IRS website's "Get My Payment" tracking feature.
Check or Direct Deposit?
According to the IRS, most people will get their stimulus money through a direct deposit to the same bank account where they would get a tax refund or make a tax payment. Those who don't get the direct deposit will get an actual check or a debit card.
Turbo Tax Issues?
There are millions of families who opt to file every year with the help of Turbo Tax, but as it turns out, it might cause a small hiccup. There are some Turbo Tax users who have reported issues with getting their stimulus payment, but the good news is that the IRS is in the progress of getting that error fixed, so those payments will be coming soon.
Tax Implications
One question that many people have is how the stimulus payment might impact future taxes and the good news. Which is totally fair, as this "unexpected" comes in as a gross number. According to the IRS stimulus payments will not count as taxable income!
New Dependents
Parents who welcomed a new baby in 2020 won't get an extra $600 when stimulus payments come out. But the good news is that parents will be able to file for an additional credit when they file 2020 taxes, so there's a reason to look forward to doing their taxes!
Are There Spending Rules?
Some people have asked if there are rules on how families can spend their stimulus money and the short answer is nope! Once the money has come through, families get to decide how to best spend that payment.
IRS Notification
In addition to the money itself, the IRS will send paper notification about the stimulus payment. This notice should be saved as part of 2020 tax documentation, even though it is not taxable income, so don't throw it away!
Will There Be More Payments?
This is the $600 (or $2,000) question! Once there is new leadership under the Biden administration, there may be additional stimulus payments forthcoming. Fingers crossed, as there are many families who need more than $600 to help their family!
