Are you in search of coronavirus tax relief? In March of 2020, Congress passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Considered the largest economic relief bill in American history, the package includes a wide variety of bailout funds for businesses and individual workers including Economic Impact Payments from the government that function as refundable tax credits.
These coronavirus tax relief credits are applied to the tax returns you file for the 2020 income tax filing season. However, they are “advanced” to the consumer now using the taxpayer’s 2019 or 2018 tax returns as a guide for Adjusted Gross Income.
The tax credit is applied to 2020 tax returns and most taxpayers will receive the difference of the credit in cases where the difference is in the taxpayer’s favor.
The non-profit Tax Foundation breaks down an example of how the tax credit works:
“If a single taxpayer with no children made $200,000 in 2019, they would not receive an advance rebate based on their 2019 income.” However, if the same taxpayer makes $35,000 in 2020, “they will receive a $1,200 refundable tax credit on their 2020 tax return.”
And what happens if the situation is reversed? “…if a taxpayer had a $35,000 AGI in 2019 but has $200,000 AGI in 2020, they would receive a $1,200 rebate now and would not have to pay it back on their 2020 tax return.”
How Much You Could Get
Do you have a Social Security Number and cannot be claimed as a dependent? You could receive $1,200 as a single filer or as a head of household. Joint tax filers could be eligible for $2,400. In such cases, there may be an additional rebate possible of up to $500 per qualifying child (see below), but income restrictions apply.
No Income Minimums
You can apply for a rebate even with zero taxable income but you are required to file a tax return in order to get these funds. All applicants must have a Social Security Number AND not be claimed as a dependent on someone else’s tax return.
Dependents under the age of 17 who have not provided for more than half of their own expenses or living arrangements are also eligible to apply for a $500 rebate.
An adult-dependent, college students older than 17, and dependents who are senior citizens don’t qualify for these rebates. In short, if you are a dependent and your parent can claim you on their tax return, the PARENT gets the rebate.
A dependent child under the age of 17 who is not claimed on the parent’s tax return as a dependent can personally qualify for the $500.The CARES Act does not have a maximum number of children for these claims but each dependent must be claimed by the tax filer on their return.
How To Get Paid
In most cases there is no further action is required since the IRS will use your most current tax return or Social Security information to apply your rebate. The rebates are paid with direct deposit if you have an account set up, or via paper check in the mail to the last address on file.
This post should not be construed as tax advice–tax laws change every year and you should consult a licensed tax professional if you have questions. Not all tax laws (including the ones listed here) apply to all taxpayers in all tax filing situations–your experience may vary.
Joe Wallace is a writer and editor from Illinois. He was an editor and producer for Air Force Television News for 13 years, and has served as Managing Editor for publications including Gearwire.com, and Associate Editor for FHANewsBlog.com. He is also an experienced book and script editor specializing in non-fiction and documentary filmmaking.