UPDATED APRIL 24, 2020 for mailing dates of checks.
As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress provided financial relief for many taxpayers with the introduction of a 2020 tax credit to be advanced to eligible taxpayers as “Recovery Rebates” (also referred to as Economic Impact Payments). These rebates will be issued as cash payments by the IRS and are expected to begin in April 2020. Without missing a beat, scammers jumped on the opportunity to use Recovery Rebates as a cover to steal money and personal information from hard working families for financial gain. Read on for more information about the recovery rebates and how to avoid related scams.
Taxpayers are eligible to receive up to $1,200 ($2,400 for married filing joint) plus an additional $500 per qualifying child. Taxpayers with Adjusted Gross Income (AGI) of $75,000 or less ($150,000 for married filing joint; $112,500 head of household) will receive the full rebate. The rebate phases out completely for taxpayer’s with AGI above $99,000 ($198,000 for married filing joint; 136,500 head of household). To estimate your recovery rebate amount click here.
Recovery Rebates are advances on a credit to be claimed on 2020 tax filings. The IRS will use a taxpayer’s 2019 tax return (or 2018 if 2019 has not been filed yet) to determine the eligible rebate amount. Taxpayers eligible for a higher rebate amount based on their 2020 tax filings will receive an additional credit on their 2020 return.
Recovery Rebates received during 2020 that exceed the credit calculated on 2020 returns will not have to be repaid. Therefore, if you have not filed your 2019 return, and your 2018 AGI would qualify you for a larger recovery rebate, you should consider delaying your 2019 tax filing until you receive any rebate payments due (keeping in mind the July 15, 2020, filing due date).
Who Does Not Qualify?
In addition to the income limitations noted above, you will not qualify for the Recovery Rebate payment if you:
- can be claimed as a dependent on someone else’s return;
- do not have a valid Social Security number;
- are a nonresident alien; or
- Filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.
What If I Don’t File Tax Returns?
Taxpayers who receive social security benefits and do not having filing requirements, will receive a $1,200 advance payment automatically. However, if you fall into this category, and have qualifying children, you will need to visit this IRS Site to input the applicable information.
Any other taxpayer, who normally is not required to file, should proceed to this IRS Site to input their applicable information.
If you have a filing requirement in 2019 and have not filed a 2018 return, you will need to file your 2019 return in order to receive the economic stimulus payment. Absent your filing a 2019 return, the credit will be available, to the extent they qualify, on your 2020 tax return.
Receipt of the Rebate
Taxpayers who authorized direct deposit by the IRS after January 1, 2018, will receive their payments electronically to the account authorized on their most-recent tax filing. If you have not previously provided banking information to the IRS, and prefer direct deposit of your rebate check, click here to update your information with the IRS. If you have not previously provided authorized direct deposit information and do not provide this information directly to the IRS via link above, you will receive a check in the mail for any rebate you are due, at your last known address.
The chart below provides an estimate of when to expect your check to be mailed, if applicable. If you already filed your 2019 return, use your AGI from 2019, if you have not, use your AGI from 2018 to calculate when to expect to receive your stimulus check.
For security reasons, the IRS plans to mail a letter to taxpayer’s last known address within 15 days after rebate payments are made. The letter will provide information on how the payment was made and how to report any failure to receive the payment. If you are unsure if you are receiving a legitimate letter, the IRS urges taxpayers to visit IRS.gov to protect against scam artists.
Beware of Scam Artists
The Cybersecurity and Infrastructure Security Agency cautions that scammers are viewing the ongoing COVID-19 pandemic advantageously, and the FBI has issued public service announcements warning that cyber attackers are looking to exploit the increased use of virtual environments and leverage uncertainty and fear to take advantage of potential victims. It is important to be aware of the following scams currently being perpetrated by malicious parties:
- Text messages pretending to be from the U.S. Department of Health claiming you need to take a mandatory online COVID-19 test in order to receive a stimulus check
- Fake emails from the Centers for Disease Control and Prevention claiming to offer information on the virus
- Phishing emails claiming to be from the IRS or other government agencies informing you that you qualify for an immediate stimulus payment and to click on a link to receive payment
- Fraudulent charitable organizations asking for donations
- Social media messages and posts claiming you can receive additional stimulus payments to help pay medical bills if you verify personal information
- Phone calls claiming you can pay a small processing fee to expedite stimulus payments by providing personal banking information
This list is not all inclusive. Be vigilant and skeptical of emails, text messages, and phone calls claiming to be from government agencies. Cyber criminals orchestrate these scams to steal money, gain personal information and install malware on your devices.
Tips to Avoid Scams
Remember the following tips to help protect yourself from potential COVID-19 related scams:
- Do not provide any bank or personal information over the phone. Government agencies like the IRS will not call to verify personal information such as banking or payment details.
- If you receive calls from someone claiming to be from a government agency HANG UP! Do not engage with them under any circumstance.
- If you receive texts or emails from someone claiming to be from a government agency DELETE IT. Do not click links or download files in emails or text messages claiming to be official requests to verify information.
- Rely only on trusted sources such as IRS.gov
Please share this post with those who may find this information valuable. These reminders are especially useful for parents and grandparents as the Better Business Bureau warns that scammers are targeting seniors during the pandemic. With all that is happening, it is crucial that American families receive the financial support provided as a part of the recently enacted CARES Act.
We hope all are safe and healthy during this difficult time. For everything you need to know about the Economic Impact Payments visit the IRS Coronavirus Tax Relief page here. For additional information about the tax implications of the coronavirus be sure to visit our COVID-19 Tax Resource Center.