August 14, 2020 | Tax Issues
All You Need to Know About Economic Impact PaymentThe ongoing outbreak of COVID 19 has badly affected each and every person all over the world. Despite the passing of dark days of five months, it has continued to do damages. As of now, the world has nothing to prevent and eliminate it. That means there is uncertainty about how long it will last. The individuals have been struggling for jobs, businesses and organizations are in a huge loss, and government bodies have weakened economically. It is maybe the worst situation in the world. The United States of America is the most affected nation by this pandemic. Millions of people are already suffering from COVID 19 and thousands of deaths have already occurred in this country. Apart from these stats, thousands of positive cases are reported every day in the US. The US government has been putting in their best effort to minimize the spread of this pandemic and maximize the survival opportunities for the citizens of their country. They have launched different COVID 19 relief schemes through which they are directly benefiting the US citizens. Economic Impact Payment (EIP) is one of those relief schemes. Here is all you need to know about Economic Impact Payment. This includes:
- What is Economic Impact Payment?
- Who All Are Eligible?
- Who All Are Not Eligible?
- Who Will Receive The Payments Automatically?
- Who Needs To Take Certain Actions to Receive Payments?
What is Economic Impact Payment?The Economic Impact Payment is a result of hardship presented by COVID 19 in the United States. It is authorized by the Coronavirus Aid Relief, and Economic Security Act (CARES) and issued by the Internal Revenue Service. In a simple term, it is an economic aid or relief for the US citizens offered due to the economic crisis created by this pandemic. Under this scheme, the US citizens, permanent residents, and qualifying resident aliens are subject to receive an Economic Impact Payment of $1,200 or $ 2,400 if they are married and filed their returns jointly. It is an automatic payment system that means, in most cases, you do not need to take any action to receive your payment. Since April 2020, the treasury department and the IRS have started distributing this necessary economic aid to the people. Today, millions of people have received their payment. If you do not receive your payment, find out below whether you are eligible for it or not. If you need a detailed explanation about it, contact a trusted New York City Tax Attorney. He/she will explain to you all about the Economic Impact Payment and tell you whether you are eligible for it or not.
Who All Are Eligible?The United States citizens, permanent residents, qualifying resident aliens, taxpayers who are not dependent on another taxpayer, and the people who have a work-eligible social security number are eligible for Economic Impact Payments. However, they must have an adjusted gross income up to:
- $75,000 for individuals
- $1,12,500 for the head of household filers
- $1,50,000 for married couples who file returns jointly
Who All Are Not Eligible?As the US citizens, residents, taxpayers, and qualifying resident aliens, you are not eligible for Economic Impact Payment:
- If you don’t have any qualifying children.
- If your adjusted gross income is greater than
- $99,000 for individuals
- $1,36,500 for the head of household
- $1,98,000 for taxpayers who are married and file their returns jointly
- If you are dependent on someone else’s returns. This includes children or students who can be claimed on their parents’ returns and the parents who can be claimed on their child’s returns.
- If you do not have a Social Security Number.
- If you are a non-resident alien.
- If you filed the below-mentioned forms for the year 2019.
- 1040-NR or 1040NR-EZ
- 1040-PR or 1040-SS
- If you are an incarcerated individual.
- If you are a deceased individual.
- If it is an estate or trust.
Who Will Receive The Payments Automatically?Most eligible IRS taxpayers will receive the amount of Economic Impact Payment automatically to their bank account. Those are:
- Individuals who have filed the federal tax returns for the year 2019 or 2018.
- Individuals who come under Social Security Requirement, Disability, and Survivor Benefits.
- Recipients of Supplemental Security Income.
- Recipients of Veterans Affairs Compensation and Pension (C&P) benefits
- Individuals who receive Railroad Retirement (RRB) benefits
Who Needs To Take Certain Actions to Receive Payments?The Internal Revenue Service has designed a unique tool named “Non-Filers: Enter Payment Info Here” for the US citizens who cannot receive the amount of Economic Impact Payments automatically due to their non-filing status. You need to use this tool to receive the payments if: You are a non-filer or you are not required to file a federal tax return for the year 2019 for any reasons such as:
- Your income is less than $12,200
- You are married and file returns jointly. Your income is less than $24,400 together.
- You have no income.