Kaptur Answers Frequently Asked Questions Related to Direct Payments
Washington, D.C. — Today, Representative Marcy Kaptur (D-OH), sent the following update to constituents answering their most frequently asked questions related to CARES Act direct rebate (stimulus) payments. The update was distributed via email as an eNewsletter and social media:
I’m writing to you today to answer some of your most frequently asked questions about CARES Act direct rebate (stimulus) payments. Many Americans will receive this stimulus payment in the coming weeks as a way to help families overcome the dual public health and economic challenges resulting from the COVID-19 pandemic. First off, I want you to know that my office is always available to help if you have any questions or concerns. We are here to serve you.
Why is the Internal Revenue Service (IRS) paying rebates to individuals?
The public health and economic consequences of the COVID-19 pandemic are significant. These rebates will help Americans afford what they need during this public health crisis, as many are experiencing a significant cash crunch.
How many rebates will be given?
The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) initially estimated that there would be 171 million rebate payments under the CARES Act. Of these, 101 million would be paid by paper check unless the IRS receives direct deposit information for these payments before a paper check is mailed.
When will the rebates be distributed?
Thanks to robust Congressional oversight, the IRS is working to deliver rebates quickly. Some individuals will receive their rebates through direct deposit starting on the week of April 13, and it is expected that most Social Security beneficiaries will receive their rebates through direct deposit in the next few weeks. Treasury plans to start mailing paper checks at the end of April. These checks will be issued at a rate of about 5 million per week. The IRS will notify an individual by mail after the payment has been made to them.
How will rebates be delivered?
This depends. Most rebates will be delivered automatically by the IRS. When such information is available, electronic direct deposit will be used in place of mailing a physical check. For individuals who filed a federal income tax return in 2018 or 2019, rebate processing will be based on bank or address information already on file with the IRS. For those who did not file a federal income tax return in 2018 or 2019, there are two pathways: all recipients of Social Security, Railroad Retirement, or SSDI benefits will be paid automatically by the IRS without having to register on the “non-filer portal.” The IRS is still considering whether it can do the same for individuals who receive Supplemental Security Income (SSI), but it is not clear at this time whether that will be possible. As a result, SSI recipients should at this time go to the non-filer portal and enter their information. If an individual already has direct deposit information on file with the IRS, electronic distributions will be automatic to an account the payee authorized on or after January 1, 2018. As discussed in more detail below, the IRS will have two online portals for individuals who have not already provided direct deposit information to the IRS.
How can I provide the IRS my direct deposit information?
The IRS will have two online portals that will allow individuals to provide their direct deposit information to the IRS: (1) Get My Payment (for tax filers who did not provide direct deposit information on their 2018 or 2019 return), and (2) Non-Filers: Enter Payment Info (for individuals who are not required to file tax returns). Both portal links can be found here.
What is the difference between the two new IRS portals?
The IRS has launched Non-Filers: Enter Payment Info for individuals who are not required to file tax returns. This portal will allow non-filers to register for their rebate payments and provide the IRS their name, address, Social Security Number, adjusted gross income, information about dependents, marital status, and direct deposit information. The IRS has also launched a separate portal—Get My Payment—for individuals who filed tax returns in 2019 or 2018 but did not provide direct deposit information at that time. This portal will allow taxpayers to find out the status of their rebate and, if no payment or check has been issued, to provide their banking information for direct deposit. Social Security beneficiaries will also be able to use this portal to learn about the status of their payment once processed. Both portals are available here.
What if I don’t have access to Internet?
For individuals without internet access, at this point there is no phone number or mail-in solution. I have communicated my concerns to the IRS that there are many impacted individuals who do not have access to the internet. The IRS is working on this as a top priority. While local libraries are closed, many places in our area are providing wifi/internet access on their grounds and in their parking lots for people with smart phones, tablets, or laptop computers.
How large are the rebates?
The amount of the rebate depends on adjusted gross income and family size. Payments start at $1,200 for each adult individual ($2,400 for joint filers), and $500 per qualifying child underage 17 (rebates are not available with respect to dependents age 17 or older, including adult dependents). Once a taxpayer’s income exceeds $150,000 for a joint filer, $112,500 for a head of household filer, and $75,000 for anyone else (including single filers), the rebate amount is reduced by $5 for every $100 of income. While many college students and seniors filed as dependents were not included, I have co-sponsored legislation to expand access to these stimulus payments for students.
Does the phaseout apply to rebate amounts related to qualifying children?
The phaseout ($5 for every $100 of income in excess of the relevant threshold) applies to the entire rebate amount, which includes rebate amounts related to qualifying children.
Is there a limit on the number of qualifying children taken into account?
No. There is no statutory limit on the number of qualifying children taken into account for purposes of the rebates.
Do rebates need to be repaid?
No, rebates do not need to be repaid. If an individual experienced an income gain in 2020 or if they have fewer dependents under 17, they will not need to repay any portion of the rebate that they received. If an individual experienced an income loss in 2020 or if they have an increase in family size, they may be able to claim an additional credit for the difference when the individual files their 2020 tax federal income tax return in 2021.
Are rebates subject to federal income tax?
No. The rebates are federal income tax refunds and are not subject to federal income tax.
Many individuals don’t need to file a tax return. Are non-filers eligible for rebates?
Yes. There is no earned income requirement to be eligible for a rebate. Non-filers who are Social Security beneficiaries will be paid automatically by the IRS. (This is a change from the IRS’s previously announced position, thanks to Congressional advocacy.) However, many other non-filers, including SSI beneficiaries, may need to take additional steps to receive their rebates. The IRS has launched an online portal called Non-Filers: Enter Payment Info for non-filers to register for their rebate. This portal can be found here: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here. The IRS will conduct a public awareness campaign to reach non-filers and provide them with information on how they can access rebates. This process is still evolving, and the IRS is posting specific guidance at https://www.irs.gov/coronavirus.
How will a person who recently has moved access rebates?
The IRS is endeavoring to pay as many individuals as possible through direct deposit rather than by mailing paper checks. If an individual provided direct deposit information on their 2019 or 2018 tax return, the IRS will use that information to make the payment rather than mailing a paper check. If the person did not provide direct deposit information on their 2019 or 2018 return but wishes to receive electronic payment, the IRS will launch a portal called Get My Payment where they can provide their banking information. Taxpayers will not be able to update their address through the Get My Payment portal. Taxpayers can notify the IRS of a change in address by following the steps described here: https://www.irs.gov/taxtopics/tc157.
Will the rebates affect my eligibility for federal income-targeted programs?
No, the rebate is considered a tax refund and is not counted towards eligibility for federal programs.
What identification requirements apply to receive rebates?
Taxpayers must have Social Security Numbers for themselves and their qualifying children in order to receive rebates.
Are families eligible for rebates when some (but not all) members have SSNs?
In the case of mixed-status families where the filer has an SSN and the child does not, the filer should be able to claim the credit for the $1,200 ($2,400 if married) for themselves, but not the $500 per child without an SSN. In the case of mixed-status families where the filer does not have an SSN and the child does, the rebate is not available except for military families where one spouse has an SSN.
Are rebates subject to garnishment or offset for delinquent federal taxes?
Are rebates subject to garnishment or offset for delinquent federal student loans?
Are rebates subject to garnishment or offset for past due child support owed to the state agency or the custodial parent?
As always, please know that my office is here to help. If you have any questions or concerns, please feel free to reach out to my office. We are here to serve you.
Member of Congress