Contact Us

Call Us 415-924-6240

GeorgiaRogers@ProActiveTaxSolutions.com

    Your Name (required)

    Your Email (required)

    Your Number (required)

    When Would You Like to Meet?

    GeorgiaRogers@ProActiveTaxSolutions.com

    415-924-6240

    Top

    What To Know About The CARES Act Stimulus Payment

    ProActive Tax SolutionsCARES Act What To Know About The CARES Act Stimulus Payment
    cares-act-what-how

    What To Know About The CARES Act Stimulus Payment

    Last week, we sent a letter out to our clients to help them navigate the evolving information contained in the CARES Act Stimulus Payment. We are sharing it here for our readers. Over the next month, we’ll keep this post updated, or at least point you in the right direction to stay abreast of the latest changes/improvements to the CARES Act.
    This is curated content that you can explore further by following various links to source sites.
    Also, please feel free to call our office at (415) 924-6240 if you need more information on how to navigate this process.

    THE CARES ACT STIMULUS PAYMENT

    By Sharon Krieder CPA, Western CPE

    The Coronavirus has infected our life in many ways. Family and friends are sick, quarantined or under a stay-in-place order. The stock market has crashed. The kids are out of school. Restaurants and shopping malls are closed. More than three million unemployment claims were filed in one week. Enough of the cable news . . .

    After a lot of talk and ten versions (one marked “final, final), Congress did something. President Trump signed into law on March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act, (the CARES Act, HR 748), a $2 trillion stimulus package to mitigate the impact of the COVID-19 pandemic.

    The CARES Act provides stimulus payments of $1,200 for each individual and $500 for each child, defined by the child tax credit rules as under age 17. The stimulus payments are not available to those without an SSN, nonresident aliens, or adult dependents.

    Who and How Much?

    Single. Individuals with AGIs up to $75,000 a year are eligible for the full $1,200 payment. The payment is reduced by $5 for every $100 in income above $75,000. The payment amount is entirely phased out at an AGI of $99,000.

    MFJ. Married filing joint couples with AGIs up to $150,000 a year are eligible for a $2,400 payment. The payment is reduced by $5 for every $100 in income above $150,000. The payment amount is entirely phased out at an AGI of $198,000 (if the taxpayers have no dependent children). Married couples also will receive an additional $500 for every dependent child under 17 and are phased out of the payment at a slightly higher AGI.

    Example – MFJ with no children. Keith and Norma are married filing joint. They have no dependent children. If they have AGI of $150,000 or less, they are eligible for a $2,400 payment. If they have AGI of $175,000, they are eligible for a $1,150 payment. At $198,000, they are entirely phased out of the payment.

    Example – MFJ with two children. Chris and Pat are married filing joint. They have two dependent children under age 17. If they have AGI of $150,000 or less, they are eligible for a $3,400 payment. If they have AGI of $175,000, they are eligible for a $2,150 payment. At AGI of $218,000, they are entirely phased out of the payment.

    HOH. Head of household filers with AGIs up $112,500 a year are eligible for the full $1,200 payment and an additional payment of $500 for each dependent child under age 17. The payment is reduced by $5 for every $100 in income above $112,500. Head of household taxpayers will also receive an additional $500 per dependent child under age 17. With no eligible children, a head of household filer is phased out at AGI of $137,000. With one eligible dependent child, a head of household filer is entirely phased out of the payment at AGI of $146,400.

    Example. Head of Household- no children under 17. Heather has an 18-year-old high school senior living with her and qualifies as a head of household filer. If her AGI is $100,000, Heather’s payment is $1,200. Her dependent child does not qualify her for the additional $500 payment because the child is not under age 17.

    Example. Head of Household- with one child under 17. If Heather’s dependent child is under age 17, her payment is $1,700.

    Example. Head of Household- with AGI above the threshold. If Heather’s AGI is

    $120,000, she is eligible for a partial rebate of $825 with no qualifying dependent child and

    $1,325 with one qualifying dependent child.