House and Senate pass $2 trillion coronavirus bill as problems for households and businesses continue to mount
Stimulus For Households:
More than 150 million households would receive checks under the legislation, which will send payments of $1,200 to many individual Americans plus $500 for children. People with incomes above $99,000 are not eligible, and the total benefit is phased out for people earning between $75,000 and $99,000.
The direct payments would fluctuate depending on the income a person reported on their 2018 taxes, according to a copy of the bill.
Here's how much you'll get based on income:
Because the payment decreases by 5 cents for every dollar over those amounts, individuals making $99,000 or more and couples making $198,000 or more will receive no payment.
The checks are set to be sent "as rapidly as possible" to direct deposit accounts used on tax filings in 2018 or later. For people without direct deposit or bank accounts, the checks are likely to be sent in the mail, which could take months.
The version of the bill that the Senate passed calls the financial assistance "2020 recovery rebates" and structures them as a tax credit. The coronavirus checks that people will receive will technically be an advance refund of that recovery rebate credit.
Because of that structure, the coronavirus check won't be considered taxable income. Instead, it'll simply reflect an adjustment to the amount of income tax you otherwise would've owed. At the same time, because the tax credit is refundable, it won't matter if you have the tax liability or not -- you'll still be able to claim it.
Moreover, it appears that the federal government will be lenient in the way that it interprets the law. For instance, the initial determination of whether you'll be eligible to get a coronavirus check will likely come from your 2018 or 2019 tax return, because the Treasury wants to get checks out as quickly as possible. Technically, eligibility for the credit depends on your income on your 2020 tax return. However, details in the bill give the IRS the latitude to look the other way for those who get checks but have a higher 2020 income that would otherwise leave them ineligible. It's therefore likely that if your income meets the threshold either in previous years or this year, you'll eventually get your $1,200.