These are uncertain times, but on March 27, we got a little hope. Known as the CARES act, the $2 trillion coronavirus stimulus bill is the largest emergency aid package in U.S. history. It was signed into law on March 27.
Three days later, the Treasury Department and the Internal Revenue Service announced that Americans who qualify can expect payments to be automatically distributed in the next three weeks. Immediately, the biggest question on everyone’s minds seemed to be: am I eligible?
The package includes a direct payment of up to $1,200 for eligible Americans, meaning tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment.
As for filers whose income exceeds the above amounts, the payment will be reduced by $5 for each extra $100 above the $75,000/$150,000 thresholds. For example, a single person with an income of $85,000 would get $700. Single filers with income exceeding $99,000 and joint filers without children who file more than $198,000 are not eligible.
Taxpayers who filed tax returns in either 2018 or 2019 will receive an economic impact payment automatically. Also, parents, take note: you will receive an extra $500 for each qualifying child.
According to Business Insider, the Urban Institute and Brookings Institution’s Tax Policy Center estimated that 90 percent of households are eligible for some kind of payment.
This payment is a one-time measure and part of the stimulus package that Senate Majority Leader Mitch McConnell unveiled last week. Some Democratic Senators such as Cory Booker argued in favor of additional checks if the unemployment rate increases. Sen. Bernie Sanders was one of the advocates for monthly payments. But they settled on the one-time payment.
In Collin County cities like McKinney, Plano, Frisco, and Allen, the median home value is $375,000, according to Zillow. Rent on the average one-bedroom apartment ranges in the vicinity of $1,200 to $1,400 a month; one month’s rent in Plano would eat up the entire stimulus payment. Some apartment complexes seem to be aware of it and are eager to be paid as soon as possible; my complex sent an email around offering a $50 Amazon gift card to anyone who paid the month of April early.
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At this point, the only way another payment would be forthcoming is if Congress explicitly authorized it, which may be an issue they will have to address in the near future if the shelter-in-place orders last longer than the April 30 deadline.
“We do have to do more, but that would be no reason to stop this step that we are taking,” House Speaker Nancy Pelosi told CNN shortly after the bill passed.
The help will be better than nothing, but it likely won’t be enough, especially as more workers are furloughed and jobs are whittled down. Most parents (about 80 percent) are worried about having enough money to cover basic housing and food costs within the next three months, according to a survey by ParentsTogether, a national parent-led organization that supports families.
Nearly half of the 1,400 parents surveyed are worried about running out within the next two weeks. That’s well before the stimulus checks will arrive.
Yet, it’s also clear that COVID-19 is nowhere close to being finished. According to a report released by the Collin County government, there are currently 130 active cases of COVID-19 in Collin County, and have been 184 total confirmed positive cases of COVID-19. Of those cases, 53 people have successfully recovered, 24 are hospitalized, and 106 remain in home isolation. There has been one confirmed death and as of this writing, 211 people are under monitoring in the county. As of yesterday, the Texas Department of State Health Services listed Texas’ count at 3,266 with confirmed COVID-19 cases in 122 of the state’s 254 counties and 41 deaths.
One month of rent will likely not carry us to the end of this crisis, but it’s better than nothing.
The majority of people won’t need to take action to receive these payments, though it is recommended that seniors and others who typically do not file returns submit a simple tax return to receive the stimulus payment. These economic impact payments will be available throughout the rest of 2020.
Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns. Just in case you were thinking of calling an IRS assistor.