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The IRS can send money electronically for taxpayers who have filed returns with direct deposit or bank account information. The government sends paper checks or debit cards to those households for which the Treasury cannot determine a bank account.
The IRS uses information on the 2020 tax returns to determine whether it qualifies and to verify the amount. The agency will use the 2019 record for households that have not yet filed taxes this year – including those who have used the “non-filer portal” for previous rounds of payment.
The legislation provides full payments of $ 1,400 to people with adjusted gross income of up to $ 75,000 for individuals, $ 112,500 for heads of household, and $ 150,000 for married couples filing joint tax returns.
Benefits are reduced for people with incomes above these thresholds. Payments will be limited to individuals earning $ 80,000 in income, heads of household with $ 120,000, and married couples with $ 160,000.
For those who have lost their jobs, the timing of filing a tax return is complicated by a newly offered tax break on unemployment benefits.
The exemption measure scraps taxes on up to $ 10,200 in unemployment benefits that individuals received last year. This provides an incentive to postpone the filing of tax returns for 2020. However, since an income loss in 2020 could make someone eligible for a stimulus check, there may be an urge to file a tax return quickly to report that income to the IRS.