The CARES Act (H.R. 748) has now been passed by Congress and signed by the President. This is like raw meat for tax geeks. I dropped everything, sequestered myself, and read until my eyes watered. Here are some of the most frequently asked questions that my most valuable clients are asking and my best efforts at answering them. DISCLAIMER – I PRESENTLY believe the answers to be true based on the text of the bill and some educated conversations with mentors and other tax geeks. Please contact me directly for clarifications.
The stimulus payments being sent out are REALLY advanced tax credits. I believe eligibility will be based on 2020 taxable income, but the advance payments being sent out will be based on 2019 adjusted gross income (AGI). If you have not filed for 2019, it will be based on 2018 AGI.
It is easy to speculate that if someone doesn’t receive an advanced payment now they will be able to claim the credit on their 2020 tax return as long as they qualify based on the current year. But that is still speculation.
The payments are up to $1200 per adult and an additional amount up to $500 per qualifying child generally a child under the age of 17 at the end of the tax year.
Taxpayers who filed tax returns in 2019 or 2018 and meet the eligibility criteria, and/or who received Forms SSA-1099 or RRB-1099 for 2019 will get the payments.