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How Much Is My Coronavirus Check?

O’Grady here.

Congress passes and the President signs a record economic stimulus law.  Freshly pulled from the government acronym generator, The Coronavirus Aid, Relief, and Economic Security Act, otherwise know as The CARES Act.

And what do most people care about?  Am I getting a check or what?

Let’s break it down and find out.

First…you’ve got to have a Social Security number to be eligible.  And not be claimed as someone’s dependent.  You don’t have to initiate anything to get it…it’ll happen automatically if you qualify.  It looks like 90% or so of Americans do.

Payments are based on your tax filing status and your Adjusted Gross Income or AGI.  That’s your gross income minus some tweaks, like retirement plan contributions, but before standard or itemized deductions.  You can find your AGI on line 7 of your 1040.

If you’re single with AGI up to $75,000 you can expect a one-time payment of $1,200.

Married couples with AGI up to $150,000 will get a one-time payment of $2,400.

And for every child under age 17, you pick up an additional $500.

The AGI threshold will be based on either your 2018 tax return or your 2019 return if you’ve already filed it.  Remember the tax filing deadline has been extended to July 15th due to this crisis.  So a lot of folks won’t have filed yet for 2019.

Planning Tip: You haven’t filed yet for 2019.  So the IRS will look at 2018 to see if you fall under the thresholds.  If you didn’t for 2018, but you made less money in 2019 and would qualify, maybe you want to hustle and file for 2019.

What happens if your AGI is higher than those amount.  Well, put your phasers on stun, because you guessed it.  There’s a phase out range.  For every $100 dollars of AGI over your  threshold, you’re docked $5.  For singles with AGI over $99,000 and couples over $198,000...you won’t get a payment.

Let’s check a couple hypotheticals.

It’s fairly clear that if you’re under your respective AGI threshold, you get the maximum amount.

What if you’re married with a couple kids, age 10 and 14.  Here’s how you figure it.  We’ll say your AGI is $120,000.  The max is $2,400 for you and your spouse, and $500 each for the two kids for a total of $3,400.  You’re under the threshold of $150,000, so you’re good to go…you get it all.

Let’s say same scenario, but the couple’s AGI is $180,000.  They’ve over the threshold by $30,000.  We said every $100 over reduces the payment by $5.  Or 5%.  In this case that’s 5% of $30,000 or $1,500.  The $3,400 gets dinged by $1,500 for a total payment of $1,900.

No kids, the AGI phase out top ends at $98,000 single and $198,000 for couples.  The range can widen depending on the number of kids.

When and where do you get the money?

The CARES Act says as soon as possible.  But realistically, that might not be until May.  

For folks getting Social Security direct deposited, the money will go to that same account.  If the IRS has your bank info from your 2018 or 2019 return, look for the money there.  Otherwise checks will go to your last known address.

Planning Tip: If you didn’t have your refund direct deposited, or you closed the account, or maybe you’ve moved recently…update your address with the IRS.  It’s Form 8822 on IRS.gov.

The CARES Act is more than 800 pages.  Those are just the basics on your payments.  Next time we’ll dig deeper into the Act and look and new rules regarding retirement plans, like 401ks and IRAs, and how to access those without penalties and some new loan provisions on 401ks.

Unless I happen to be your financial advisor, don’t take specific advice from some guy on a website or social media who doesn’t know your unique situation. 

Stay healthy my friends.