Guest column: Getting economic impact payments to those who need them
President Trump has signed into law several pieces of legislation intended to ease the financial impact of the COVID-19 Pandemic. One of these pieces of legislation was the authorization of economic impact (stimulus) payments of up to $1,200 per qualifying adult and $500 per qualifying dependent. In its rush to pass legislation which would authorize stimulus payments, the U.S. government unintentionally excluded one large group from receiving payments — citizens over age 65 with income below the annual income tax return filing threshold.
Congress intended to provide payments to “most Americans,” which they defined as those who filed a 2018 or 2019 income tax return showing income under certain thresholds ($75,000 for single filers, $112,500 for heads of household, and $150,000 for joint filers). Individuals can qualify for the stimulus payment if they earned less than the income thresholds in either 2018 or 2019. However, many seniors do not file annual income tax returns because they do not receive income in excess of their standard deduction.
It appeared that many people over age 65 would be excluded from receiving 2020 stimulus payments purely because they did not need to file a 2018 or 2019 income tax return. The federal government originally said that seniors and other non-filers would need to file a 2019 income tax return in order to receive a stimulus payment. This requirement placed unnecessary stress on seniors who were quarantined or sheltering in place who would not otherwise file a return. Low-income seniors were faced with potentially having to pay to have an unnecessary income tax return prepared purely to receive a stimulus payment.
Due to public outcry, the rules were changed so that qualified non-filers now have an easier way to access stimulus payments.
This week, the IRS has created a portal on its home page where seniors and other non-filers can input their bank account information so that the IRS can directly deposit their stimulus payments. The website for the portal is: www.irs.gov/corona virus/non-filers-enter-payment-info-here
Each person applying for a stimulus payment through the IRS portal must provide, at a minimum, his or her full name, current mailing address, email address, date of birth and Social Security number. Applicants should also include a bank account number, type and routing number to expedite receipt of stimulus payments. The IRS has stated if no bank account information is provided, a paper check will be mailed, and checks may not be mailed until September or October 2020.
The IRS expects to add an additional tool on its website by next week which will allow users to determine when to expect their stimulus payments. This tool will be especially useful because the IRS is no longer accepting phone calls from taxpayers or tax practitioners.
While April 15 is a date that many dread, there are new penalty-free filing and payment extensions available this year. Part 2 of this column will address those options.
Mary Feichthaler is a licensed CPA and has 24 years of experience assisting individual, corporate and nonprofit clients in all areas of taxation including income tax compliance and audits, sales tax, FIRPTA and offers in compromise. She has lived in Cape Coral since 2002. She graduated magna cum laude from Georgetown University with a degree in accounting and graduated magna cum laude from Pace University with a Masters in Taxation. She can be reached at email@example.com or at 239-898-8522.
The information in this article is general in nature and not intended as tax advice to anyone. Individuals should consult with a licensed CPA before making any tax or investment decisions.