Devine Millimet | NH Law Firm

Economic Impact Payments for Individuals under the CARES Act


Jennifer R. Rivett, Esq.
Joyce M. Hillis, Esq.

April 1, 2020

A critical component of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, as signed into law by President Trump on March 27, 2020, is to provide economic relief to individuals during these uncertain economic times.  However, only certain individuals will be eligible to receive an Economic Impact Payment of up to $1,200.

Who is eligible?
In order to receive the full $1,200 (or $2,400 per married couple) the individual must meet the following qualifications:

  1. Must be a U.S. resident or U.S. citizen and have filed an income tax return in 2018 and/or 2019;
  2. Must have an Adjusted Gross Income (AGI) under $75,000 per individual, $112,500 for head of household, or $150,000 for a married couple filing jointly;
  3. Not be a dependent claimed by another taxpayer; and
  4. Must have social security number.

Eligible parents will also receive $500 for each qualifying child, which, under the existing tax code,  has been historically defined, in part, as a child who is under the age of 17 who lives with the parent more than one-half of the tax year who claimed the child as a dependent on the parent’s tax return in the applicable year.

The amount phases out for those with AGI over the limits at a $50 per $1,000 earned over the applicable threshold amount.  It phases out entirely for those without qualifying children at $99,000 for taxpayers, $136,500 for head of household, or $198,000 for married couples filing jointly.

2019 income tax returns will be used to determine AGI for purposes of calculating the payment amount.  If you have not filed your 2019 return, then your 2018 return will be used to determine your AGI.

How much?
Individuals who qualify will receive a payment $1,200 per person, plus $500 per dependent child. As noted above, the amount is reduced if your AGI is over the threshold amount.

For example, a married couple who earned a total of $125,000 in 2019 with two dependent children under the age of 17 will receive $3,400.

How will the IRS know where to send the payment?
For most taxpayers, no action is necessary.  The IRS will calculate and automatically send the payments using the same direct deposit information that was provided on the 2019 income tax return. If no direct deposit information is on file with the IRS, then the IRS will have a web-based portal for individuals to provide their banking information for direct deposit.  Otherwise, a physical check will be mailed to the address on the most recently filed income tax return. 

For taxpayers who have not yet filed their 2019 income tax returns, the IRS will use the information from their 2018 income tax filing.

Can Non-Filers receive a payment?
Yes, certain non-filers can receive a payment. Some individuals with lower incomes, including some Social Security recipients, are not typically required to file an income tax return.  In order to receive an economic impact payment, those individuals will need to file a simple income tax return for 2019 to confirm filing status, the number of dependent children, and direct deposit bank information. The IRS will be making specific information about filing a 2019 return for these individuals available soon.

When will I get paid?
Payments are expected to being in the next three weeks. However, a specific date has not been released. We are watching these developments closely and will keep you updated as we learn more.

Hopefully, these economic impact payments will provide some relief for those who need it, particularly workers who have been laid off, furloughed or have experienced a substantial loss of income as a result of the COVID-19 pandemic.

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