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Understanding the CARES Act Relief Payments
April 23, 2020 @ 5:00 pm
Economic Impact Payments –commonly referred to as “stimulus checks” or “recovery rebates”– are a key provision of the Coronavirus Aid Relief, and Economic Security (CARES) Act legislation that Congress passed to help reduce the financial burden of COVID-19 on individuals and their families. The payments are an advance of a temporary credit for 2020 (which you file taxes for in 2021).
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Many individuals still have many questions about the economic impact payments, including: Are they eligible for them? How do they apply? And what should they do with the payment once it arrives?
The Center for LGBTQ Economic Advancement & Research, the National Center for Lesbian Rights, the Center for Law and Social Policy, and the Center on Budget and Policy Priorities have developed these informational materials will update our online resource pages here and on the CBPP site to help those who still have questions find answers.
The Center on Budget and Policy Priorities has its Economic Impact Payments FAQ available their website at A Guide to Economic Impact Payments for Advocates.
Last Update: July 14, 2020
Who is eligible for an Economic Impact Payment?
Income Limits: If you are filing as single with an adjusted gross income (AGI) up to $75,000, married filing jointly with an AGI up to $150,000, or head of household with an AGI up to $112,500, you will receive the full payment. Above these income limits, the payment amount decreases 5 percent for every additional $100 of income up to $99,000 for a single adult, $136,500 for head of household, and $198,00 for a married couple.
If you have zero income you can still get the payment.
Age requirements: There is no age requirement for the stimulus check, however you cannot be someone else’s dependent. Children must be under 17 to get the additional payment for them.
Taxpayer Identification Number (TIN): You must have a valid Social Security Number in order to receive a check. If you are married filing jointly, both spouses must have Social Security Numbers (one for military). The whole household will be disqualified from the payment if one spouse has an Individual Taxpayer Identification Number (ITIN), with the exception of military spouses and adoption tax identification numbers. Children can have a Social Security Number or an Adoption Identification Number (ATIN). If a child has an Individual Taxpayer Identification Number (ITIN), you won’t get the additional payment for them, but you can still get the main payment.
How much money will I get from the stimulus check?
Eligible taxpayers will receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Up to $500 is provided for each qualifying child who is a dependent under 17.
Will I get an Economic Impact Payment for my child?
You will receive an additional $500 per qualifying child. A qualifying child must be related to you (by blood, marriage, or adoption), under the age of 17, live with you for over half the year, have a Social Security number, and be claimed as your dependent. These are the same qualifying rules as for the Child Tax Credit.
Can young adults receive the $1,200 payment?
You cannot receive the $1,200 payment if you can be claimed as someone else’s dependent.
Whether or not you can be claimed as a dependent is based on your age, your relationship to the filer, whether you lived with your parents for more than half of the year, and whether you were financially independent for more than half of the year. This will affect many full-time college students who are under 24 years old, since they can be claimed as dependents by their parents depending on these factors. You can find more details about whether or not a child qualifies as a dependent here.
However, even if you shouldn’t be claimed as a dependent due to your circumstances, that doesn’t necessarily mean that you weren’t claimed as one. If you are in contact with your family, check in with them to make sure they did not claim you as a dependent.
Do I qualify for the rebate payment as a street-based sex worker?
Yes, as long as you meet the general eligibility requirements. If you have not filed your taxes in 2018 or 2019, you will have to file your 2019 taxes or complete the online form for those who don’t file taxes, unless you receive Social Security, SSI or veteran benefits.
Applying for Your Economic Impact Payment
How do I apply for the Economic Impact Payments?
If you’ve filed a tax return for tax year 2019 or 2018, you don’t need to do anything. The IRS will automatically send your payment. Social Security recipients, including Social Security Disability Insurance (SSDI), railroad retirees, and Supplemental Security Insurance (SSI) and Veterans Affairs (VA) beneficiaries will also automatically receive a check.
If you aren’t normally required to file a tax return, you have the option of filing the IRS non-filer form with the IRS. You’ll need an email address to create an account. You’ll need to provide your full name (and name of spouse, if present), mailing address, date of birth, Social Security number, bank account information (if available), driver’s license or state-issued ID (if you have one), and details for any qualifying children you have.
What if I have not paid taxes in 2018 or 2019?
The IRS has provided an online form for you to fill out for the purpose of receiving the economic impact rebate payment if you do not have taxable income and you don’t need to file taxes for 2018 or 2019. Social Security, SSI, SSDI and veteran benefit recipients do not need to fill out this form to get their payment, but they can use the form to identify any children they have that are eligible for the $500 payment. This form will ask you to provide the necessary information to receive the payment. Individuals who are eligible for the Earned Income Tax Credit (EITC) should use the Free File site instead of the form so you can receive all of the money that you are eligible for.
If your gross income exceeded $12,200 in 2019 ($24,400 for a married couple), then you should file a federal tax return on the Free File site rather than use the non-filer online form. You should file your taxes online and avoid filing your return by paper, if possible.
You can receive the economic impact payment through December 31, 2020. If you do not file before the end of the year, you can receive the payment when you file your taxes in 2021.
What if I don’t have an email address?
You need to use an email address to complete the IRS non-filer form to get the payment if you don’t need to file taxes. The email will be used to confirm submission of your form.
The IRS will not email info about your payment. If you don’t have an email address, you can ask a family member or friend to use their email, or create a temporary email address using a site like 10minutemail.com or guerrillamail.com. These sites allow you to check messages sent to the address for a short period of time which will allow you to confirm your account and form submission.
What if I receive Social Security payments?
Good news! Social Security and Social Security Disability Insurance recipients will receive the economic impact payments automatically. This means that you will not need to file any additional forms or do anything to receive the payment. The IRS will use the information they already have on file and get the payment to you. BUT if you have any dependent children eligible for the $500 payment, you will need to fill out the IRS non-filer form by Wednesday, April 22nd at noon EST to claim those children.
What if I receive Supplemental Security Income (SSI)?
Good news! SSI recipients will receive the rebate payments automatically like Social Security, SSDI and veteran benefit recipients will. This means Social Security, SSI and SSDI recipients do not need to do anything to get their payment – they will get it the same way they get their usual monthly payments. BUT if they have any dependent children eligible for the $500 payment, they will need to fill out the IRS non-filer form ASAP to claim those children. The IRS has not announced a deadline yet, but we will update the FAQ as they do.
How can I file my taxes?
If you know you need to file a 2019 tax return, you should do so as soon as possible to get your Economic Impact Payment and any tax refund that you are eligible for.
Online: If you’re comfortable using computers and confident preparing your own taxes, consider using a free online tax software.IRS Free File is one option available if your income is $69,000 or less. If you choose to use one of the programs that are part of this coalition, be careful to read the fine print. (Each program has slightly different criteria for their software). MyFreeTaxes is another online tool that helps you file your taxes for free. Unlike Free File, MyFreeTaxes does not have an income limit.
Virtual Help: Code for America, in partnership with Volunteer Income Tax Assistance (VITA), (an IRS-sponsored free tax preparation program), has created a fully virtual intake process for free tax assistance. Visit Get Your Refund to connect with an IRS-certified volunteer who will help you file your taxes remotely.
Your local VITA site may also have virtual options. Some VITA programs provide a drop-off site, where you can drop off your tax forms to have a tax preparer complete your return and contact you when it is ready to review before it is sent to the IRS.
Remember: You should NEVER have to pay to receive online help filing your taxes. There are free resources out there!
Is there a deadline to get my Economic Impact Payment?
The IRS must have your information by October 15, 2020 to issue your payment this year. For many people, this means filing your taxes or completing the IRS non-filer form. See question 8 on how to apply for the payment for more information.
If you miss this deadline you will be able to get your payment next year by filing a 2020 tax return.
Getting Your Economic Impact Payment
How will I get the Economic Impact Payment?
If you filed a tax return for tax year 2019 or 2018, the IRS will use your tax return information to determine the amount of your payment and will deliver it using the direct deposit information (if provided) or mailing address on the return. Social Security recipients, railroad retirees, and SSDI, SSI, and VA beneficiaries will be sent the payment using the information the Social Security Administration currently has on file.
When will I get the Economic Impact Payment?
The fastest way to receive the payment is through direct deposit. The IRS started distributing payments to people who already filed a 2019 or 2018 tax return and provided direct deposit information on April 9. Payments continued to be delivered through direct deposit throughout the month. Paper checks started to be mailed to people without direct deposit information at the end of April. Mailed payments are expected to have a significant delivery delay and some people will not receive payments for several months. See the chart at the end of this article for an estimated timetable for the IRS to mail checks.
The IRS’ Get My Payment tool allows you to look up the status of your payment, including the date when the payment is scheduled to be deposited or mailed.
What if I do not receive the payment?
If you recently filed taxes, the IRS may still be processing your return. The IRS doesn’t have your direct deposit info if you owed federal taxes, didn’t get a refund, or had your refund mailed.
Use the Get My Payment tool by May 13 to add your direct deposit details to get your payment sooner. After this date, the IRS will mail paper checks to people who already filed taxes. If you don’t have an account for direct deposit and cannot establish one, your payment will be mailed by check.
What if I don’t have a bank account?
There are ways you can sign up for a bank account. You can set up your account in-person at a bank or credit union branch. You can also open a bank account online through one of these banking providers:
- Self Help Federal Credit Union
- Consumers Federal Credit Union
- NASA Federal Credit Union
- Alliant Credit Union
- Simple Online Bank
- Ally Online Bank
If you don’t have a bank account, a paper check will be sent to the address you listed on your tax return.
Direct deposit is the quickest and safest way to get payments. Alternatives to receiving a paper check are opening a bank account or using a prepaid debit card. Once you get a card, you may need to contact the company directly to find the account and routing numbers needed for direct deposit. To find a bank, you can view this list of accounts offered by financial institutions that meet national standards. You can also use payment apps like CashApp, Venmo, or PayPal.
If I had a bank account closed because I overdrafted, can I open another one?
Yes, you can open a new bank account, even if you have had a bank account closed due to an overdraft or deficient balance. However, if the financial institution that closed your account is reporting your deficient balance and account closure to other banks (which some do), it may affect your ability to open a bank account with another financial institution.
Can I use someone else’s banking account for my payment?
No. You must use a banking account that is under your name. Different names on the tax return and bank account will trigger a reject of the deposit, causing the IRS to send you a paper check which will delay the delivery of your payment.
What if I do not have a permanent address?
Shelters and other service providers, such as health care clinics and drop-in day centers, may allow you to use their address for tax purposes.
Other agencies that offer homeless prevention services like a Community Action Agency or Salvation Army are also options. If you are not staying in a shelter or cannot find a service provider nearby, you can also use a trusted relative’s or friend’s address. The IRS will deliver checks to P.O. boxes.
Will any of the money be taken out if I owe the government money?
No, with the exception of overdue child support payments. (In California, an executive order will require any overdue child support payments to be paid to the custodial family rather than the state. Each state can decide whether this money will be garnished for overdue child support payments.)
How will I get my payment if I got a Refund Anticipation Check (RAC) or Refund Anticipation Loan (RAL) when I filed my taxes?
The IRS will attempt to deliver your payment to the account information provided on your tax return. Some RALs and RACs are issued through debit cards. If the card is still active, you will receive your payment on the card. If the account or card is no longer active, the deposit will be rejected, and the IRS will send a paper check to the address on the tax return.
You can check Get My Payment for updates on your payment delivery. If you see that the payment has been directly deposited into an account that you don’t have access to, contact the tax preparer who filed your return. If you are unable to reach them, contact your local Low Income Tax Clinic or Taxpayer Advocate Service (TAS) office for help.
What if I filed my taxes last year under my previous name, and have changed my name since I filed those taxes?
If you file your taxes and have not filed your 2019 taxes, you should file as soon as possible with your new name. Make sure your name is updated with the Social Security Administration.
If your check is written out to you under your previous legal name, you should still be able to deposit your check. However, you may need to speak with your bank and show your legal paperwork documenting your court ordered name change and old and new ID. It helps to remind tellers that this is the same process for people who change their name after marriage and may have a different name printed on their checks.
What should I do with the money?
Because this is a payment directly to you, you can use the funds that you receive in whatever manner you choose. The money is yours to use for whatever you need to use it for. Since each person’s financial situation and needs are different, there is no one-size-fits recommendation for what you should do with your money once it arrives.
If you are still earning a full income, and you are able to fully afford your expenses using that income alone, the payment may be surplus to your needs. If so, you may want to consider:
- donating your stimulus check to a COVID-19 relief effort to provide assistance to others less fortunate.
- saving that money for later, in case your financial situation changes. If you do not have any emergency savings (or enough emergency savings to cover 2-3 months of expenses) you may want to start one now, just in case.
- If you have a financial advisor, you may want to consult with them around how best to save, invest, or donate your CARES Act benefits so you can make the maximum personal or community financial impact with your payment.
But knowing what to use your stimulus payment for can be more difficult if you are not earning a full-time income at present, and also if you have experienced or anticipate difficulty affording all of your rent, utilities, necessities, and credit obligations out of your income.
Using your CARES Act Payment for maximum impact:
- Make a monthly spending plan: Includes all of your income and expenses (including your CARES Act payment)–so you know how much money you have, and what expenses you need money for. There are many ways you can create your spending plan: You can find many worksheets and templates online to make a spending plan, you can use an online budgeting tool (such as Mint, YNAB, or your financial institution’s budgeting tool), or you can even make your own excel spreadsheet. Add up your total expenses and subtract them from your income total. If your total income is less than your current total expenses, this means that you cannot afford all of your expenses out of the current amount of income. In order to afford your monthly total expenses that exceed current income, you may have to rely on savings or credit to afford those expenses–if those sources are available. But, if you do not have savings or credit available to cover those costs, you may not be able to afford those expenses in the future, and may have to make changes in your income or spending in order to make all of your expenses affordable.
- Prioritize your Current Payments: Write down the total amount of your income at the top of a page. Then, start listing your expenses, from most important to least important, and write the cost for each next to the related expense. Subtract the cost of each expense from your total income. When you reach 0 income, draw a line under that expense. Continue listing your expenses and the cost for each. This exercise will allow you to see what expenses you can afford, and what expenses are unaffordable. In order to afford any expenses below the line, either the total income must increase or the amount of expenses above the line must decrease. Once you know which of your expenses are affordable and which are unaffordable, you may be able to make extra room in your budget by economizing–i.e. reducing costs by eliminating extra spending on non-essentials. IMPORTANT NOTE: When choosing to prioritize payments, make sure to prioritize those costs that are essential to supporting your well-being, such as:
- Medical supplies,
- Shelter, and
- Your loan repayment and other payments to your collectors or creditors (except your mortgage) are less important than your health and well being.
- Strategize & Think Ahead: Consider your employment situation. Is it likely to improve or to worsen in the future? Will you be able to afford your current expenses out of your income in the future without the extra income provided by the CARES Act payment?
- Get Help if You Need It: Financial planning can be stressful at the best of times, and it can be particularly stressful when your financial future is uncertain or difficult. But there are many nonprofits that offer financial and credit counseling that offer FREE one-on-one assistance to individuals to help them create budgets and plans to manage their difficult to manage financial situations or debts. Some groups you might want to look at to find counseling include:
- The National Reinvestment Coalition – https://ncrc.org/ -Offers a variety of resource for consumers, including housing and budget counseling.
- The National Foundation of Credit Counselors – https://www.nfcc.org/ -Offers a variety of services for consumers including, housing, credit, and budget counseling.
I do not need the payment but I am eligible to get it. Where should I donate the money?
Consider donating to organizations and mutual aid efforts that support LGBTQ people who are completely or partially left out of government relief efforts (The CARES Act allows individuals to deduct up to $300 for charity donations made in 2019 from their income even if not filing an itemized 2020 tax return).
Those groups include:
- LGBTQ Nonprofits:
- Undocumented people:
- Sex Work Mutual Aid Funds
Other LGBTQ-specific resources
Here are some LGBTQ-specific resource lists and documents that have been produced for individuals to use during the COVID-19 Crisis:
- National LGBTQ Anti-Poverty Action Network COVID-19 Resource List – (https://docs.google.com/document/d/1PrgYyGSh2otp97SrHhs1a3KqdiW-1yoUfAzwuzCN9fE/edit?usp=sharing)