The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (CARES). The House is expected to pass this legislation this morning and the president to sign it into law shortly after. Included in the legislation are 2020 recovery rebates for individuals.
According to the Senate Committee on Finance summary:
All U.S. residents with adjusted gross income up to $75,000 ($150,000 married), who are not a dependent of another taxpayer and have a work eligible Social Security number are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child. This is true even for those who have no income, as well as those whose income comes entirely from non-taxable, means-tested benefit programs, such as SSI benefits.
For the majority of Americans, no action on their part will be required to receive a rebate check as the IRS will use a taxpayer’s 2019 tax return if filed, or alternatively, their 2018 return. This includes many low-income individuals who file a tax return in order to take advantage of the refundable earned income tax credit and child tax credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phaseout threshold. The amount is completely phased out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
We understand this payment will result in many questions from clients and the public. This morning, we were on a call with the IRS. They are aware that, when this law passes, there will be a lot of unanswered questions the IRS will need to address. - From NATP Tax Pro Weekly
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