We talked last week about how to discuss mortgage forbearance with your clients, but equally important during this time is the topic of the stimulus check.
To become a trusted advisor during this uncertain time, you have to educate yourself on the subjects that matter most to your clients and partners. And the stimulus check–an economic impact payment distributed by the Internal Revenue Service (IRS) in response to the COVID-19 crisis–is one such topic.
What are the stimulus checks?
Under the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act, $2.2 trillion is being used to help support Americans. $300 billion of that is going toward direct stimulus payments for individuals.
Who is eligible for a stimulus check?
There are a few factors involved in determining who will receive a stimulus check. First, an individual must have a social security number, and not be a dependent. An individual must earn less than $99,000 to receive a payment. This is determined by their adjusted gross income on their most recent tax filing. Additionally, those who file their taxes jointly, must make less than $198,000 per couple.
How much will an individual’s stimulus check be?
If someone earns $75,000 or less a year, they will receive a $1,200 check. Couples filing jointly will receive $2,400. If an individual earns between $75,000 and $99,000 (or a couple earning between $150,000 to $198,000), they will receive a small check, based on their income.
For instance, for every $100 extra in adjusted gross income, $5 in assistance is removed. An example would be that for someone who earns $80,000 a year, they will receive $950.
Additionally, households with children under age 16, will receive an extra $500 per child.
When will the checks be sent?
Stimulus checks began to be distributed to Americans beginning on April 13th. These payments were sent via direct deposit, to those who already filed their taxes, and have direct deposit with the IRS already set-up.
Paper checks will begin to be mailed out shortly afterward. The IRS will be issuing paper checks based on annual gross income (AGI). If you know your gross income from 2019 (if you had already filed your tax return) or 2018, you can determine exactly when you will receive your stimulus check.
Here’s when you’ll get your stimulus check, based on your Annual Gross Income (AGI):
- If the IRS has your direct deposit information on file: the week ending April 17.
- Paper checks for people with up to $10,000 in AGI: the week ending April 24.
- $10,000-$20,000 AGI: the week ending May 1.
- $20,000-$30,000 AGI: the week ending May 8.
- $30,000-$40,000 AGI: the week ending May 15.
- $40,000-$50,000 AGI: the week ending May 22.
- $50,000-$60,000 AGI: the week ending May 29.
- $60,000-$70,000 AGI: the week ending June 5.
- $70,000-$80,000 AGI: the week ending June 12.
- $80,000-$90,000 AGI: the week ending June 19.
- $90,000-$100,000 AGI: the week ending June 26.
- $100,000-$110,000 AGI: the week ending July 3.
- $110,000-$120,000 AGI: the week ending July 10.
- $120,000-$130,000 AGI: the week ending July 17.
- $130,000-$140,000 AGI: the week ending July 24.
- $140,000-$150,000 AGI: the week ending July 31.
- $150,000-$160,000 AGI: the week ending Aug. 7.
- $160,000-$170,000 AGI: the week ending Aug. 14.
- $170,000-$180,000 AGI: the week ending Aug. 21.
- $180,000-$190,000 AGI: the week ending Aug. 28.
- $190,000 AGI-$198,000 AGI: the week ending Sept. 4.
- All other checks (those who didn’t have tax info on file): the week ending Sept. 11
It’s important to note that this chart is based on AGI whether you are an individual filer, or filing as a married couple. Therefore, some married filers, who are still eligible for a stimulus check, will not receive their payment until September.
How can people find out about the status of their payment?
The IRS has created a website, where you can input your information, and check on the status of your stimulus check. If you happen to receive a “Payment status not available,” when you enter your data but you should be eligible for a payment, don’t worry! There are a couple reasons that may be the case, including if the IRS hasn’t finished processing your tax return.
What should people do with their stimulus check?
As a trusted advisor to your clients, you may receive questions about stimulus checks. If they receive one, they may wonder the best way to use it for their financial security. For specific questions beyond the basics, refer out to your trusted financial advisors.
A financial advisor will be able to assist them in understanding if they don’t need to spend the check on necessities such as housing, food, or utilities, where they could invest the money or put it into a savings account. Whether they use the money for building their emergency fund, or saving for a child’s college tuition, the stimulus check can be a good boost.
The United States’ CARES Act includes support for individuals and families who might be feeling the impact of the Coronavirus. Continue to be there for your clients, and help answer any questions they might have about their assistance payments. This will earn their trust in you as an advisor and a place to turn with any questions!