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COVID-19 & CARES Act Financial Planning Series: #1 "Where's My Check?"

As you have seen in the news, the brand-new $2 trillion CARES Act stimulus bill was signed into law on 3/27/2020. Now that the 335-page Act is available, we are creating a financial planning blog series to help you understand how you may benefit from the financial aspects of the bill.

How much is my check going to be?

The provisions regarding the stimulus checks have garnered the most attention from the media. You have likely read that the CARES Act provides a refundable income tax credit against 2020 income of up to $2,400 for married couples filing a joint return, while all other filers begin with a refundable credit of up to $1,200. The credit amount then increases by up to $500 for each child a taxpayer has under the age of 17

What are the income limits?

The applicable Adjusted Gross Income (AGI) threshold amounts are as follows:

  • Married Filing Joint: $150,000 (phased out at $198,000)
  • Head of Household: $112,500 (phased out at $136,500)
  • All Other Filers: $75,000 (phased out at $99,000)

The phaseout is $5 for each $100 over the limit. For example, if a single person’s AGI is $80,000, then the check will be for $950. This calculation is based on the following formula: $80,000 - $75,000 = $5,000. $5,000/$100 = $50. $50 X $5 = $250. Therefore, the $1,200 check is reduced by $250 to equal $950.

This online calculator may be helpful for you as well.

Which tax return year is the check based on?

The amount is based on either your 2018 or 2019 AGI, whichever is the most recent tax return that you have filed. Therefore, if you are more likely to receive a check based on your 2018 income, you may want to consider delaying your 2019 tax filing until after your check is received (up to the new tax filing deadline of 7/15/2020).  On the other side, if you are more likely to receive a check based on your 2019 income, you may want to consider filing as soon as possible.

What if my income will be lower in 2020?

If your 2018 and 2019 income makes you ineligible to receive a check, but your 2020 income would deem you eligible, you will receive the tax credit when you file your 2020 tax return according to the same income limits. Therefore, this provision will not be helpful for you until early 2021.

How will I receive my check?

The IRS will be issuing the funds to the most recent bank account information on file. Therefore, the check will be issued to the bank account you provided on your tax return if you received a tax refund for 2018 or 2019. If you did not provide bank account information, the check will be mailed to your most recent address on file with the IRS. If you have moved, you should consider filing an IRS Form 8822 to update your address as soon as possible. If you are collecting Social Security benefits, the check will be deposited in the same account as your benefit payment.

When will I receive my check?

This is the magic 8-ball question right now! Although the goal is to issue these checks as soon as possible, the IRS is already short-staffed and this is a huge undertaking. Set your expectation that the earliest you might see your check is May 2020.

For more detailed information on all financial aspects of the CARES Act, we recommend that you read this excellent article.


Julie Fletcher McDaniel, CFP®, has been in the financial services industry since 2006.  She is a co-founder of IMPACTfolio, a wealth management firm that specializes in IMPACT investing and holistic financial planning for one flat-fee. For more information, visit https://impactfolio.co/.