Stimulus Checks - How They Will Be Calculated

[Beancounter]

https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html

 

Now that the stimulus package has been approved many Americans will be receiving checks based on their ADJUSTED 2018 gross income. This article in the link above details how these stimulus checks will be calculated.

 

I need to do further research on this topic....will the stimulus checks be taxable income, when the checks will be issued, etc. However, I thought Forum members might be interested in this information as it unfolds.

Edited March 25, 2020 by Beancounter

[down_to_business]

...

Now that the stimulus package has been approved many Americans will be receiving checks based on their ADJUSTED 2018 taxable income. This article in the link above details how these stimulus checks will be calculated.

 

I need to do further research on this topic....will the stimulus checks be taxable income, when the checks will be issued, etc. However, I thought Forum members might be interested in this information as it unfolds.

 

As I read so far, the calculation would be wages+social security+pension income. Do you have any idea how required RMD(s) would factor into this equation? Would someone become ineligible if they simply converted a traditional IRA into a Roth IRA (over income limit)?

[+ stevenkesslar]

https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html

 

 

From the article:

 

Self-employed workers, those seeking part-time work, and workers who quit their job or can’t reach their place of work as a result of COVID-19 are among those eligible for benefits.

 

How do others read that?

 

The way I read it is that an escort or a massage therapist who is self-employed could make an unemployment claim. Does that sound right?

 

Obviously, escorts will have listed their occupations as something else. But it sounds like they are not just talking about people who worked for "traditional" employers.

[Kevin Slater]

As I read so far, the calculation would be wages+social security+pension income. Do you have any idea how required RMD(s) would factor into this equation? Would someone become ineligible if they simply converted a traditional IRA into a Roth IRA (over income limit)?

 

 

My understanding is that the determinant is your AGI (either from your 2019 return, or 2018 if you have yet to file for 2019). As I think RMDs and a Roth conversion all add to your AGI, yes, those would count toward the stimulus limits (<75K to get the whole $1200, nothing for those >99k).

 

I wonder if one could game the system by rushing to file her 2019 return if she has a Roth conversion in 2018, say.

 

Kevin Slater

[Beancounter]

As I read so far, the calculation would be wages+social security+pension income. Do you have any idea how required RMD(s) would factor into this equation? Would someone become ineligible if they simply converted a traditional IRA into a Roth IRA (over income limit)?

My understanding is that the determinant is your AGI (either from your 2019 return, or 2018 if you have yet to file for 2019). As I think RMDs and a Roth conversion all add to your AGI, yes, those would count toward the stimulus limits (<75K to get the whole $1200, nothing for those >99k).

 

I wonder if one could game the system by rushing to file her 2019 return if she has a Roth conversion in 2018, say.

 

Kevin Slater

Mr. Slater is correct. RMD AND Roth conversions are part of your adjusted gross income. If you filed a 2018 tax return.....pull the return from your files and go to line 7 of the return. This will provide you with your adjusted gross income and be the basis for your stimulus check.

 

 

And, in the interest of full disclosure, I’m not offering tax advice here. It’s been nearly 20 years since I’ve worked in the tax field and tax laws and forms have undergone an almost complete metamorphosis. I’m just hoping this information will provide Forum members with an idea of how much they can expect to receive.

[Oscar Not Wilde]

In terms of when they'll be received, Treasury Secretary Mnuchin said that if the IRS had recipients direct deposit information on file from tax filing for refunds that payments would be received in 3 weeks. It would be longer, into May, if they had to mail out a check.

[Kevin Slater]

tax laws and forms have undergone an almost complete metamorphosis.

 

Unrelated side-rant that I've been wanting to spew for a while:

 

They really need to stop fucking with the forms. For my entire adult life, I think, there was a standard look and feel to the 1040. Tax laws would change and maybe there'd be a slight tweek in the form (like adding a line or perhaps two), but in general, this year's return would look like last years'. These bullshit new schedules one through three are unnecessary and make it far too confusing to follow the path of the numbers. I suspect it's all toward to goal of making the first page of the 1040 look clean and simple (akin to the oft-stated goal of having your tax return fit on a postcard), but that's bs when you create four new pages to replace the half-page you eliminated.

 

Kevin Slater

[Beancounter]

My understanding is that the determinant is your AGI (either from your 2019 return, or 2018 if you have yet to file for 2019). As I think RMDs and a Roth conversion all add to your AGI, yes, those would count toward the stimulus limits (<75K to get the whole $1200, nothing for those >99k).

 

I wonder if one could game the system by rushing to file her 2019 return if she has a Roth conversion in 2018, say.

 

Kevin Slater

 

https://fortune.com/2020/03/25/stimulus-check-coronavirus-relief-bill-when-checks-sent-who-qualifies-how-much-retirees-taxable-direct-payment-faq/

 

Here’s a link to a good article that’s answers many questions and especially the one you had about the timing of filing an individual tax return.

 

The good news: It appears the stimulus checks will not be taxable

[Alfstoria]

I dont know how it will be calculated, what I know is going to end in the back pocket or some boys

Because I dont want to go through another Social Distance ever again without enjoying some hot boys.

[Alfstoria]

I dont know how it will be calculated, what I know is going to end in the back pocket or some boys

Because I dont want to go through another Social Distance ever again without enjoying some hot boys.

LMAO. I am still in my hiring prime, but boy, I am glad that I have been running around some countries finding me some boys in the past 3/4 years. So if its over I've had some delicious men. But If i get out if this quarantine i will use my free time like this social distancing is back tomorrow.

Edited March 30, 2020 by Alfstoria

[+ stevenkesslar]

Debit cards may be used for stimulus payments

The IRS will also issue paper checks to some people.

 

I'm reading that to suggest that they will use electronic payments, if possible, for people who filed electronically, complete with banking information.

 

Or, it could just mean they are looking into options and they don't know yet.

[Beancounter]

And the answer is:

 

https://www.kiplinger.com/tool/taxes/T023-S001-stimulus-check-calculator-2020/index.php

 

Click on the above link and calculate your stimulus check amount.

[+ quoththeraven]

From the article:

 

Self-employed workers, those seeking part-time work, and workers who quit their job or can’t reach their place of work as a result of COVID-19 are among those eligible for benefits.

 

How do others read that?

 

The way I read it is that an escort or a massage therapist who is self-employed could make an unemployment claim. Does that sound right?

 

Obviously, escorts will have listed their occupations as something else. But it sounds like they are not just talking about people who worked for "traditional" employers.

Unemployment is supposed to apply to gig workers and the self-employed, yes, although that's a separate issue from the $1200 stimulus checks.

 

As I understand it, people like me who don't have to file tax returns will have to file one to get the $1200 payment, and it will take four months to get a check if the IRS doesn't have direct deposit information on file. I didn't file or have to file in 2018, and the same would be true this year and going forward. Moreover, I've changed bank accounts twice since I last got a refund.

 

Taxing those payments would be contrary to the point of making them. They also shouldn't count for means-tested benefits, either.

[RealAvalon]

I hope that the stimulus cheques will have more value than anything your president says.

 

Admin Warning: Stay on topic. OP intended this subject for the Lounge.

Edited March 27, 2020 by Cooper

[+ stevenkesslar]

Unemployment is supposed to apply to gig workers and the self-employed, yes, although that's a separate issue from the $1200 stimulus checks.

 

Have you seen any written info on how unemployment works for gig workers? One of my tenants is an escort, and several are gig workers of various types. My assumption is they all file returns - I know my escort buddy does, for example. Eventually they will educate me on how it works, I'm sure.

 

I was wondering what the IRS would do about bank accounts. If they have info on file from a year ago, i.e. Tax Year 2018, I would think some of that is going to be bad data. People move, people change accounts. For people who have filed Tax Year 2019 it would obviously be much more recent, and this far more likely to be accurate. If you assume 5 % of people who filed electronically moved or changed accounts, the IRS has to factor that in. And they can't know which 5 % those people all, of all the electronic filings.

 

Hopefully they are directed by POTUS to figure that out. I'm not a tech guy. But it seems like figuring out a way for us to say, "Here is my tax ID and here is my bank acct. info" would be easier to the IRS than them sending refunds to accounts automatically and then finding out that maybe 5 % of them are wrong.

[+ stevenkesslar]

Have you seen any written info on how unemployment works for gig workers?

 

Answered my own question:

 

For the first time, Uber drivers and other gig workers would qualify for unemployment insurance as part of the Senate's $2 trillion coronavirus stimulus bill

 

Federal law says unemployment payments should be the same weekly pay as they would earn from their employer, capped by a maximum amount set by the state. The max amount varies by state. For instance, Florida's maximum is $275 a week; California's is $450 a week.

 

But the coronavirus stimulus bill also provides for four months of additional unemployment insurance, up to an additional $600 a week, for everyone who qualifies for unemployment, including gig workers.

 

The extended unemployment benefits in this bill attempt to protect workers "whether they work for small, medium or large businesses, along with the self-employed and workers in the gig economy," Sen. Chuck Schumer, Democrat of New York, said in a press release.

[+ quoththeraven]

Answered my own question:

 

For the first time, Uber drivers and other gig workers would qualify for unemployment insurance as part of the Senate's $2 trillion coronavirus stimulus bill

 

Federal law says unemployment payments should be the same weekly pay as they would earn from their employer, capped by a maximum amount set by the state. The max amount varies by state. For instance, Florida's maximum is $275 a week; California's is $450 a week.

 

But the coronavirus stimulus bill also provides for four months of additional unemployment insurance, up to an additional $600 a week, for everyone who qualifies for unemployment, including gig workers.

 

The extended unemployment benefits in this bill attempt to protect workers "whether they work for small, medium or large businesses, along with the self-employed and workers in the gig economy," Sen. Chuck Schumer, Democrat of New York, said in a press release.

So in other words gig workers get a flat $600 without having to prove income.

 

About the tax returns, they can't use 2019 because a) most of those returns aren't filed yet and b) the filing deadline has already been postponed. I haven't checked but I assume this includes postponing the payment requirement, or at least waiving penalties and interest for failure to pay by April 15th.

[Kevin Slater]

So in other words gig workers get a flat $600 without having to prove income.

 

I've read conflicting reports.

 

MSNBC is reports

 

Q: I'm self-employed and didn't previously qualify for unemployment. Am I eligible now?

Yes. This bill creates a new program, called Pandemic Unemployment Assistance, that extends benefits to gig workers, contractors and others who wouldn't otherwise qualify for unemployment compensation but cannot work due to the coronavirus emergency. You'll get the $600 per week, plus half the average unemployment benefit in your state.

 

NYT reports

 

Are gig workers, freelancers and independent contractors covered in the bill?

Yes, self-employed people would be newly eligible for unemployment benefits.

 

Benefit amounts would be calculated based on previous income, using a formula from the Disaster Unemployment Assistance program, according to a congressional aide.

Self-employed workers would also be eligible for the additional $600 weekly benefit provided by the federal government.

 

But in either case, self-employed folk get the $600 on top of some other figure.

 

Kevin Slater

[+ stevenkesslar]

So in other words gig workers get a flat $600 without having to prove income.

 

I assume that, and also that they may get "regular unemployment", which in California as that article I posted said is up to $450 a week. Same thing Kevin said.

 

What I'm reading into it is that people will have to "prove" what their regular Gig income is.

 

I talked to my escort buddy/tenant and he had no idea this was possible. He just figured he didn't qualify for unemployment, period. Which was true, before this week. He was obviously delighted.

 

He has filed taxes as self-employed for years (as have I) so if needed he can use that. Maybe both things Kevin posted are correct. It could be that for people who don't have documentation, like last year taxes, they will just give them half the maximum state benefit.

 

In California I think you may be able to apply online.

 

https://www.edd.ca.gov/unemployment/UI_Online_File_a_Claim.htm

 

I'll know better in a week after he has gone through the hoops.

[+ stevenkesslar]

Treasury Secretary says Americans can expect stimulus checks to be direct deposited within 3 weeks

 

Treasury Secretary Steven Mnuchin said Sunday that Americans could expect checks from the historic $2 trillion stimulus bill to be direct deposited in their accounts within three weeks but experts have determined it could take longer to receive the money.

 

Congress and President Donald Trump enacted the stimulus bill last week to address the dramatic economic crisis caused by the coronavirus pandemic. Included are direct payments to many Americans, an unprecedented expansion in unemployment benefits and $350 billion in small business loans.

 

Mnuchin told CBS' "Face the Nation" that there will be a web-based application for those who don't receive direct deposit to give the IRS the necessary information.

 

It is not clear how long it would take the agency to send out all the money, but it would likely take weeks before the first payments start going out. Mnuchin said last week that the IRS would begin issuing payments within three weeks of the legislation being signed into law. The bill simply calls for payments to be made "as rapidly as possible."

 

 

That makes sense, if they can figure it out. There should be a way for taxpayers who did not use direct deposit before to give the IRS their deposit info now. In addition, people who did use direct deposit for their 2018 taxes could have filed electronically over a year ago. Some percentage of the bank info the IRS has must be outdated. People moved or changed bank accounts. So it seems like some way to update old info makes sense, anyway.

[arlinguy]

The stimulus payment is technically a rebate on 2020 taxes which is why the payments are not taxable. I won't repeat the formula since it was posted previously. The first round of stimulus payments are scheduled to be issued no later than April 10. Those payments will go to the millions of 2019 and 2018 tax filers who provided bank account information to the IRS when they submitted their tax forms. They are also working on matching social security benefit payments made to individuals who did not have to file taxes to send them the stimulus payments as well (over 98% of benefit payments are paid electronically).

 

It will take much longer for the millions who did not provide bank account information (aka received a refund check or paid taxes due by check). For those people, they are working on creating a portal called "wheresmystimuluscheck.gov" where people can enter bank account information. Those people will be in the second wave. The third wave will be the remaining people who do not want to give bank account information, or they may be unbanked.

 

The third wave will either receive checks or debit cards. The details are being finalized but checks can take up to 3 months to distribute due to capacity issues.

 

As you can tell, I know a lot about the process so feel free to ask questions and I will answer them the best I can.

[FINDM4M]

https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html

 

Now that the stimulus package has been approved many Americans will be receiving checks based on their ADJUSTED 2018 gross income. This article in the link above details how these stimulus checks will be calculated.

 

I need to do further research on this topic....will the stimulus checks be taxable income, when the checks will be issued, etc. However, I thought Forum members might be interested in this information as it unfolds.

The checks will not be taxable income. If you need help with small business disaster relief I posted a video on that here https://www.companyofmen.org/threads/small-businesses-get-10k-disaster-relief-how-to-video.156806/

[+ stevenkesslar]

The stimulus payment is technically a rebate on 2020 taxes which is why the payments are not taxable. I won't repeat the formula since it was posted previously. The first round of stimulus payments are scheduled to be issued no later than April 10. Those payments will go to the millions of 2019 and 2018 tax filers who provided bank account information to the IRS when they submitted their tax forms. They are also working on matching social security benefit payments made to individuals who did not have to file taxes to send them the stimulus payments as well (over 98% of benefit payments are paid electronically).

 

It will take much longer for the millions who did not provide bank account information (aka received a refund check or paid taxes due by check). For those people, they are working on creating a portal called "wheresmystimuluscheck.gov" where people can enter bank account information. Those people will be in the second wave. The third wave will be the remaining people who do not want to give bank account information, or they may be unbanked.

 

The third wave will either receive checks or debit cards. The details are being finalized but checks can take up to 3 months to distribute due to capacity issues.

 

As you can tell, I know a lot about the process so feel free to ask questions and I will answer them the best I can.

 

I do have a few questions.

 

I haven't filed 2019 taxes yet. If I do that this week, is it likely or even possible I'm captured in this first round of people who filed in 2019?

 

I do my own taxes and I've always found it easier to just do them on paper, and mail them. I'm not particularly worried about when I get a check. But I've been toying with the idea of doing them online this week, for the first time in my life. Is there any reason to think that makes any difference? Is there a cut off date, like if you file your taxes by April 10 and include bank info you get captured in this first wave?

 

The other reason I usually wait until April is I almost always owe money. So if I have never given them bank information before, and I actually owe the IRS money (which is now due July 15) can I still file and give them bank info for purposes of sending me a stimulus payment?

 

Thanks.

[jjkrkwood]

I'd be VERY surprised if ANYONE actually sees a check come from this stimulus package. I deem the whole stunt FAKE NEWS to stimulate the market. That's how cynical i have become. Sorry @stevenkesslar , you and I will just have to start selling off our glitter frocks and cubic zirconias for xtra Dollas !

[+ stevenkesslar]

I'd be VERY surprised if ANYONE actually sees a check come from this stimulus package. I deem the whole stunt FAKE NEWS to stimulate the market. That's how cynical i have become. Sorry @stevenkesslar , you and I will just have to start selling off our glitter frocks and cubic zirconias for xtra Dollas !

 

 

Well, I'll just look on the bright side. It's always fun to put on a fashion show with my dearest and most darlingest friend.