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All you have to know about 'Economic Impact Payment'

Who is eligible to receive 'Economic Impact Payment'?

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:

  • $75,000 for individuals
  • $112,500 for head of household filers and
  • $150,000 for married couples filing joint returns

  • Taxpayers will receive a reduced payment if their AGI is between:
  • $75,000 and $99,000 if their filing status was single or married filing separately
  • 112,500 and $136,500 for head of household
  • $150,000 and $198,000 if their filing status was married filing jointly
  • The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

    Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.

    Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.

    Who is NOT eligible to receive 'Economic Impact Payment'?

    Although some filers, such as high-income filers, will not qualify for an Economic Impact Payment, most will.

    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.

    How much can you expect?

    Eligible individuals with adjusted gross income up to $75,000 for single filers, $112,500 for head of household filers and $150,000 for married filing jointly are eligible for the full $1,200 for individuals and $2,400 married filing jointly. In addition, they are eligible for an additional $500 per qualifying child.

    For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children are not eligible and will not receive payments.

    Do you need to take any action?

    1. People who filed a tax return for 2019 or 2018

    No additional action is needed by taxpayers who:
  • have already filed their tax returns this year for 2019. The IRS will use this information to calculate the payment amount.
  • haven’t filed yet for 2019 but filed a 2018 federal tax return. For these taxpayers the IRS will use their information from 2018 tax filings to make the Economic Impact Payment calculations.
  • 2. First Time Filers in year 2019

    Residents who are required to file U.S. Individual Income Tax Return for the first time have time to file their Tax Return until July 15, 2020 but are advised to file as soon as possible to get eligibility to receive Economic Impact Payment as well as the refund amount, if any, of TY2019.

    3. People who aren't typically required to file a tax return.

    Social Security and Railroad Retirement recipients who are not typically required to file a tax return need to take no action. The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate Economic Impact Payments of $1,200 to these individuals even if they did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits. Social Security Disability Insurance (SSDI) recipients are also part of this group who don't need to take action.

    For Social Security, Railroad retirees and SSDI who have qualifying children, they can take an additional step to receive $500 per qualifying child.

    There are other individuals such as low-income workers and certain veterans and individuals with disabilities who aren’t required to file a tax return, but they are still eligible for the Economic Impact Payments. Taxpayers can check the IRS.gov tool - Do I Need to File a Tax Return? - to see if they have a filing requirement.

    The IRS will soon provide guidance for these individuals on the steps to take to get their payment as soon as possible.

    Beware of Scams related to Economic Payments, COVID-19

    The IRS urges taxpayers to be on the lookout for scam artists trying to use the economic impact payments as cover for schemes to steal personal information and money. Remember, the IRS will not call , text you, email you or contact you on social media asking for personal or bank account information – even related to the economic impact payments. Also, watch out for emails with attachments or links claiming to have special information about economic impact payments or refunds.

    Incase of any queries on 'Economic Impact Payment', please feel free to call Universal Financials at 1-626-626-7935 or mail to contact@universalfinancials.com.

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