By Amy Irvine, CFP®, EA, MPAS®, CCFC
FINANCIAL PLANNER
I started with this section because we feel it is important for our clients to know if they are or are not eligible for this rebate.
Over the weekend, I've noticed a great deal of confusion regarding this provision. Let's start with what it is.
It is a rebate provided to those with eligible income (see below). The bill actually uses the language "credit" for the first taxable year beginning in 2020.
What are the amounts?
$1,200 single
$2,400 joint return
$500 per qualified child (under the age of 17)
Who is eligible?
$75,000 Single (and in my interpretation, married filing separate, since it states "as not described in paragraphs 1 or 2" listed below)
$112,500 Head of Household
$150,000 Joint
If your income is above that limit, it will be reduced by 5% for each $100 of income over those thresholds. Complete phase out:
$99,000 single
$146,500 Head of Household
$198,000 Joint
What tax year is this based on?
2019
2018 if you haven't filed your 2019 tax return
If you haven't filed, the legislation states that they may use alternative information such as your SSA-1099.
What if my income is more in 2018 and 2019, but less in 2020?
You will receive the credit when you file your 2020 tax return and benefit at that time.
What if my 2018 income was lower and I haven't filed 2019?
As noted above, the rebate will be based on your 2018 income.
Interestingly, the language seems to read that if your 2019 income would have reduced your benefit, then you won't be subject to refunding the rebate.
When should you expect to receive the rebate?
"As soon as possible" is the language used.
Our guess, Mid-May
Will these checks be taxable?
No