The COVID-19 pandemic has caused widespread economic disruption across the country, leaving millions of individuals and businesses facing an uncertain future. In an effort to mitigate the financial fallout, the federal government implemented the CARES Act, which includes direct payments to most taxpayers. Because the rules governing these payments can be confusing, you may want to speak to an accountant to see if you qualify.

Direct Payments Under the CARES Act

The CARES Act is designed to provide significant direct economic relief to American workers and businesses. For individuals, the centerpiece of this legislation is one-time recovery rebate tax credits, also known as “stimulus checks.”

This program provides a direct payment of $1,200 for most taxpayers, plus $500 for each qualifying child. These payments are automatic, so most taxpayers don’t need to do anything to qualify.  However, your payment may be reduced if you reported higher income on your 2018 or 2019 tax returns, resulting in some higher-income taxpayers not receiving any stimulus payments.

Who Qualifies for Direct Payments

Almost every American taxpayer is eligible for direct payments, including Social Security and SSDI benefits. The IRS bases their determinations on your 2019 tax returns, or 2018 if you haven’t filed yet this year. If you haven’t filed a return since the 2017 season, the IRS has an online tool that allows you to access your stimulus payment at irs.gov.  But, you need to hurry as this tool expires on May 5.

When Will Direct Payments Go Out?

The IRS has already disbursed nearly 100 million payments, many to Social Security and disability recipients. While the government’s response has been swift, this is a massive undertaking, so some people may be waiting for weeks.

Fortunately, the IRS has launched a portal that allows taxpayers who filed their 2018 or 2019 tax returns to provide direct deposit information and track their scheduled payment date.

If you’re unsure how the federal response to the pandemic benefits you, an experienced accountant can explain the law and minimize confusion during this difficult time. With decades of experience serving individuals and businesses throughout the Lewisburg, PA, area, Donna J. Troutman CPA PC is committed to giving every client their full attention and advice based on the latest changes to the tax code. Visit their website for more important tax updates or call (570) 523-7337 to schedule an appointment.