Stimulus direct deposit, checks and EIP cards.

[SecondCor521]

What?? You mean this is NOT free money??
BTW, what is a "credit amount?"

Uh, did you read what I wrote?

Yes, it is free money. It's a new tax credit that got put into law by the CARES Act that didn't exist before.

The credit amount is the amount of the tax credit to which you are entitled based on your 2020 AGI.

People are getting stimulus payments based on their 2019 or 2018 AGI. This stimulus payment is an advance payment of the tax credit.

So what will happen on everyone's 2020 tax return next year is that they will calculate the tax credit they are entitled to based on their 2020 AGI. Then there will be a line to list how much they actually received in their advance stimulus payment.

If the two amounts are the same, then great, you got what you're supposed to. If you should have gotten a bit more (say your AGI was in the phaseout range and dropped between 2019 and 2020), then that amount will be treated as an additional refundable credit on your return. If you should have gotten a bit less (say your AGI was in the phaseout range but increased between 2019 and 2020), then you got more than you should have but the government is going to say "keep the change" and not make you pay it back.

 

[RetireAge50]

Someone hacked into our checking account and put $2,400 in there today. Thank you government.

 

[cathy63]

I am not collecting SS and just have dividend income. I do file, but I owe nothing and get nothing from the federal government, just always have to pay state. I would still be entitled to a check, correct?

Thanks

Yes, but you will get a paper check at some later date since you didn't receive a tax refund in 2019 or 2018. If you want to get a direct deposit, then you can provide your bank information to the IRS once they open up the "Get My Payment" application in mid-April. You can get to the Get My Payment app from here: https://www.irs.gov/coronavirus/economic-impact-payments

 

[jazz4cash]

Stimulus direct deposits

So I could cancel IRA withdraws to qualify for more stimulus, borrow the funds needed for spending, and get the extra stim credit when I reconcile 2020 taxes?

Sorry, It’s tough to not think of gaming the system when it’s so easy to do even while I don’t feel entitled to anything since our income is not affected.

 

[SecondCor521]

So I could cancel IRA withdraws to qualify for more stimulus, borrow the funds needed for spending, and get the extra stim credit when I reconcile 2020 taxes?

Sorry, It’s tough to not think of gaming the system when it’s so easy to do even while I don’t feel entitled to anything since our income is not affected.

Anything you do that reduces your AGI into or below the phaseout range will increase your credit. The phaseout is at a 5% rate, so this stimulus credit is yet another parallel tax system.

I think the governments are well aware that some people can decrease their AGI to qualify for all sorts of tax benefits. From their point of view, I think this represents some combination of "it's a feature, not a bug" and, "Meh, most people can't (or don't want to) decrease their AGI".

If your cost of borrowing is less than 5%, and you can get yourself into or below the phaseout range, then sure, it might be a good idea.

 

[cathy63]

So I could cancel IRA withdraws to qualify for more stimulus, borrow the funds needed for spending, and get the extra stim credit when I reconcile 2020 taxes?

Sorry, It’s tough to not think of gaming the system when it’s so easy to do even while I don’t feel entitled to anything since our income is not affected.

Yes, there are some people who are in a position where they can manipulate their 2020 income in order to qualify for the stimulus. It's a small number of people though, and the amount of time and effort it would take to close this loophole would probably cost more than the amount the government would save by doing so. To do this, you'd be going to an awful lot of trouble in order to claim an amount that's less than 1.6% of your regular income.

 

[garyt]

Got ours today

 

[Hermit]

.... So what will happen on everyone's 2020 tax return next year is that they will calculate the tax credit they are entitled to based on their 2020 AGI. Then there will be a line to list how much they actually received in their advance stimulus payment.

If the two amounts are the same, then great, you got what you're supposed to. If you should have gotten a bit more (say your AGI was in the phaseout range and dropped between 2019 and 2020), then that amount will be treated as an additional refundable credit on your return. If you should have gotten a bit less (say your AGI was in the phaseout range but increased between 2019 and 2020), then you got more than you should have but the government is going to say "keep the change" and not make you pay it back.

I have been withdrawing enough from tIRA to make up my final SSA check for years. In March I started my SSA check. With only 75% being taxed, my AGI should go down. Maybe enough to bump me up to $1200!

 

[rodi]

Just checked our credit union.... Stimulus tax credit shows as pending. Woot.

 

[cyber888]

Those with income below $10,000 will get it first, followed by those with income below $20,000. If you’re income is higher, expect it by May the article I read said

 

[SecondCor521]

Those with income below $10,000 will get it first, followed by those with income below $20,000. If you’re income is higher, expect it by May the article I read said

The Secretary of the Treasury, whom I trust more than a random article, stated in today's press briefing that all direct deposits should be made by Wednesday for people who have filed tax returns and provided bank information.

Direct deposits for Social Security recipients will be next.

Checks for those who did not provide bank information will be after that. The Treasury Secretary has said that checks will be sent out to those with lower AGIs first. Approximately 5 million checks per week is what I have seen.

There will be a website that allows you to provide bank information to the IRS; I infer that this will enable you to get a direct deposit (sooner) rather than a check (later).

 

[beanctr88]

On a semi related note, I filed my return on 02/27. It was a fairly simple return with a 1,603 refund.
Still waiting for it.

You might want to check into that. I filed two returns for family members who were due refunds around that same time and they received them in less than a week. This was done via e-file with one of the major software packages.

 

[SecondCor521]

You might want to check into that. I filed two returns for family members who were due refunds around that same time and they received them in less than a week. This was done via e-file with one of the major software packages.

If Dtail paper filed on 2/27, it wouldn't be surprising to still be waiting for a refund, even if they put bank information on their return. My son filed on paper around that same time and put his bank info on his return, and it was still showing as processing as of a few days ago.

I agree with you, though, that if Dtail e-filed the refund should have been processed in about 9 or 10 days (assuming no EITC).

 

[Dtail]

If Dtail paper filed on 2/27, it wouldn't be surprising to still be waiting for a refund, even if they put bank information on their return. My son filed on paper around that same time and put his bank info on his return, and it was still showing as processing as of a few days ago.

I agree with you, though, that if Dtail e-filed the refund should have been processed in about 9 or 10 days (assuming no EITC).

Thanks.
I did e file with a direct deposit number. It is showing as still in process.
What else can I do?

 

[mistermike40]

My account shows pending transactions, but nothing regarding the stimulus check yet

 

[SecondCor521]

Thanks.
I did e file with a direct deposit number. It is showing as still in process.
What else can I do?

Hmm. I don't think there is much to do but wait, monitor the refund status tool at the IRS, and follow their guidance if the time frame isn't met.

Did you claim EITC? Is there any potential identity theft issue (this year or past years) or dependent claiming issue? Those are the only things I think that can hold up a refund, although I'm no expert so there could be other things holding it up too.

 

[street]

NBC reported the direct deposits will start today, and they are nevah wrong.

 

[CountryBoy]

I don't want to look a supposed gift-horse in the mouth, but does anyone know if this stimulus check will or will not apply towards our MAGI this year? I do Roth conversions every year to meet the minimum income requirements to qualify to buy Obamacare. I'm just wondering if I'll be converting $1200 less (provided I get this check).

 

[SecondCor521]

I don't want to look a supposed gift-horse in the mouth, but does anyone know if this stimulus check will or will not apply towards our MAGI this year? I do Roth conversions every year to meet the minimum income requirements to qualify to buy Obamacare. I'm just wondering if I'll be converting $1200 less (provided I get this check).

It is a tax credit, so it's treated like federal income tax withholding paid on your behalf. It is not income and is not part of MAGI for Obamacare purposes. (Speaking more broadly, it is also not part of AGI for any purpose.) You can ignore it for purposes of determining how much to Roth convert.

 

[street]

^ No the stimulus money isn't recorded as income and will not count against ACA or doesn't have to be claimed as income.

A free gift no strings attached.

 

[CountryBoy]

Thanks very much for the quick (and helpful) response, guys!

 

[powerplay]

My stimulus payment shows as pending in my checking account today!

 

[Mr. Tightwad]

I would like to thank Secondcor for all of his excellent information and help. So good to have around.

 

[Dash man]

We’re showing a pending amount of $842.65 cents. I wasn’t expecting anything. We’ll pass this along to our kids.

 

[Dtail]

Hmm. I don't think there is much to do but wait, monitor the refund status tool at the IRS, and follow their guidance if the time frame isn't met.

Did you claim EITC? Is there any potential identity theft issue (this year or past years) or dependent claiming issue? Those are the only things I think that can hold up a refund, although I'm no expert so there could be other things holding it up too.

I did not claim EITC. I had the potential identity theft with the giving out my SS# with the recent false CD rate scam, but have not seen any evidence of it.
I also claim my 61 y.o. brother as a dependent, but have done so last year too with no issues.