The CARES Act Stimulus Payments - Part I: Eligibility

During the week of April 13, 2020, Americans began receiving Economic Impact Payments, better known as “stimulus checks,” most of which were deposited directly into their bank accounts. These stimulus checks are one result of the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act). The payments are expected to stimulate taxpayer spending, spur economic activity and provide relief for economic hardships related to COVID-19.

WHO IS ELIGIBLE?

According to the legislation, individuals and head of household tax filers are eligible for up to $1,200 (USD) and married and jointly filing taxpayers are eligible for up to $2,400 (USD). More specifically, eligible payees are U.S. residents with a Social Security Number whose adjusted gross income (AGI), as determined by Line 8b on their IRS Form 1040, does not exceed:

• $99,000 for individuals whose filing status was single or married filing separately,
• $136,500 for head of household filers, and
• $198,000 for married couples filing joint returns.

For individuals and families with a qualifying child, each of these threshold amounts increases by $10,000 for each additional qualifying child. 

The amount of any reduced payment will be based upon the taxpayers’ specific adjusted gross income.

Other Eligible Individuals

Eligibility is based on your 2019 tax return. However, if you have yet to file your tax return for 2019, the federal government will determine your eligibility based on your 2018 tax return.

If you have never filed a tax return, your eligibility will be based on information from a Social Security Benefit Statement or

Social Security Equivalent Benefit Statement from 2019. Recipients of Social Security, disability or veterans’ benefits, and eligible retirees will receive a payment.

 Taxpayers who are not required to file a 2018 or 2019 federal income tax return because their gross income is below the required threshold of $12,200 ($24,400 for married couples), or for other reasons, are eligible. Individuals who have no income and individuals whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits, will receive payments.

Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically.

Qualifying Children

All eligible recipients are also eligible for an additional $500 per qualifying child who was age 16 or younger by the end of the taxable year (usually December 31 of the year prior to the year your federal income tax return was filed).

Most taxpayers will not receive the $500 payment for the qualifying dependents on their tax returns because they are over age 17. These same college students under age 24 will most likely be ineligible for a stimulus payment because they have been claimed as dependents on someone’s taxes. For the same reasons listed above, taxpayers will not receive an additional $500 for qualifying relatives.

All qualifying children must have a valid Social Security Number. Adopted children must have an adoption taxpayer identification number.

 There is no limit to the number of qualifying children any household may receive funds for, as long as each qualifying child meets the aforementioned requirements.

WHO IS NOT ELIGIBLE?

If any of the following apply, taxpayers likely won't qualify for an Economic Impact Payment:

• Individuals who do not have a valid Social Security Number (this also includes any qualifying child).
  • Special rule for members of the U.S. Armed Forces: For married and jointly filing taxpayers, Social Security Numbers are not required for both individuals, if at least one spouse was a member of the U.S. Armed Forces at any time during the 2018 or 2019 taxable year and at least one spouse has a valid Social Security Number.
• Filers whose AGI exceeds $99,000/$136,500/$198,000 based on their respective filing status, with no children, are not eligible and will not receive payments.
• Nonresident aliens (individuals who have not passed the green card test or the substantial-presence test). 
• Dependents (anyone who has been claimed on someone’s taxes, such as a child, student, or older dependent who can be claimed on a parent’s return.)
• Estates or trusts are ineligible to receive Economic-Impact Payments.
• Taxpayers who filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.

To read more about Economic Impact Payments, including how to calculate expected stimulus payment amounts, please read "The CARES Act Stimulus Payments - Part II: How Much Should You Expect and More Information."