Finance geek or not, I have no doubt that you have all heard about the CARES Act and government stimulus packages by now. If you haven’t, you will by the end of this blog post and if you have, you will definitely have learned a lot more.
What exactly are the CARES Act and stimulus package? The CARES Act is a $2 trillion dollar relief package issued by the government with the intention of aiding U.S. citizens who suffered the most from the economic impacts of COVID-19. Stimulus checks, on the other hand, are a name used to describe the payments themselves, which the government calls an “economic impact payment”.
Numerically, the act grants up to $1,200 per adult for those whose income was <$99,000 ( or $198,000 for joint filers) and $500 per child under 17 years old. For a family of four, the maximum is $3,400. Those who did not file tax returns in 2018 or 2019 are also eligible to receive $1,200 from the IRS as long as they have a Social Security number. If you are still confused, you can calculate your stimulus check using this calculator.
But what exactly are these payments? The stimulus check is actually something called a “tax credit,” meaning that it reduces your overall tax bill. While the money cannot be used to pay off government debts, it is still subject to bank seizure if it is directly deposited in your account. How? Well, if you are in the negative, banks will use the check to offset the debt. Luckily, some larger banks are temporarily pausing this practice so that their customers get access to the checks.
If you qualify (and have a SSN), the IRS will send you the check as you would normally receive your benefits. If you have not provided your bank information yet to the IRS, you can do so here. The deadline for this is May 13, so act fast! If you miss the deadline, don’t worry; they will send you a paper check, but the process will take much longer.
Along with this information, however, it is important to keep in mind that this is an imperfect system for unprecedented times. It is especially important to keep track of your personal financial records and stay current with updates from the government/IRS. For more information, we recommend you visit https://home.treasury.gov/policy-issues/cares/ and read www.businessinsider.com ‘s articles on the stimulus packages. Above all, continue to stay safe and informed!