Myth Busting the Relief Payment
We are in this together! Stronger together, safer six feet apart! Stay home, stay safe! Stay inside, save lives! All of these are currently household names since the National and Nashville Public Health Officials issued “Safer at Home” orders closing non-essential business operations and instructed residents to not go to work unless they are providing essential services such as healthcare, grocery stores, transportation, or pharmacies. With the order extending through the end of April, many people will be depending upon the anticipated relief funds to help pay bills, even if the payments won’t cover everything.
The CARES Act, Coronavirus Aid, Relief, and Economic Security Act was signed into law on March 27, 2020 in response to the financial impact experienced by many during the 2020 pandemic. As part of this bill, the federal government is now authorized to pay each American citizen who meets the guidelines a “one-time” transaction being called an “economic impact payment”. But…. Who gets it? What is it exactly? Is it taxable? Does it have to be paid back? How do I get it?
Who Gets It?
In general, the CARES Act is expecting to provide economic assistance for American workers, families, and small businesses and the most basic “who gets it?” guidelines are:
- Individuals who make up to $75,000 will receive $1,200
- Families filing jointly and making up to $150,000 will receive $2,400
- Families with children receive an extra $500 per qualifying child (dependents under 17 years old)
- Social security recipients will also receive a check
- Individuals or households making more than the above will receive reduced payments, possibly down to no payment depending upon income level
- Income is determined from the taxpayer’s 2019 or 2018 tax return, whichever is on file
What Exactly Is It?
“What is it?” is a common question surrounding whether the payments are taxable or will reduce 2020 tax returns. The CARES Act is relying on the Internal Revenue Service’s infrastructure to make these payments via direct deposit where accessible or via a web portal for people who don’t have a bank account of file with the IRS. Although information is evolving daily, the primary confusion is that these payments are “technically” a tax credit, but there will also be a corresponding rebate credit to balance everything out. Non-technically speaking, the stimulus payment is a bonus and won’t have to be repaid.
Resources To Answer Your Questions
“How do I get it?” Most importantly, no action is required for the majority of people in order to receive the payment. Like many small businesses and employers alike, the IRS is working with a reduced staff and advises people not to call their office, but official information about the payments can be found here: https://www.irs.gov/coronavirus/economic-impact-payments
While there is a lot of information floating around about the stimulus payments, information for American workers be found on the treasury department’s website here: https://home.treasury.gov/policy-issues/cares/assistance-for-american-workers-and-families and for small businesses here: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses
In closing, we stated this already in our March blog post, but the message is still truer than ever today…
Randolph Business Resources provides excellence in financial management and bookkeeping, along with a compassion, understanding, and gratitude. We have always served our clients from the heart and are here to help in any way. We are here to lend a hand and together, we will get through this.
By Susan Amsler
April 14, 2020
Randolph Business Resources, LLC.
Our experienced staff are ready to lend a hand to you and your business.
Visit us @ www.randolphacctg.com
Call us at: (615)202-5829 if you need immediate assistance