Hoping for a stimulus check? Here’s what you should know.

By now, you’ve probably heard that the federal government will send stimulus payments to Americans to help everyone weather the financial tsunami caused by the coronavirus pandemic.

But how will it work? Who qualifies and how much will you receive? What do you have to do to get the money? And when will a check arrive?

The good news is that the stimulus package — named the Coronavirus Aid, Relief and Economic Security Act, or CARES Act — sets aside money for this, in the form of tax rebates for individuals.

Here’s how the rebates will work.

• What are recovery rebates?
• How much is the rebate?
• What are the income limits for the rebate?
• How can I get a stimulus payment?
• When will I get my payment?
• What if I don’t make enough to file taxes?
• How can I check on a rebate?
• What’s the catch?

What are recovery rebates?

With millions of Americans already out of work because of the coronavirus pandemic, the CARES Act aims to help bolster the economy. A key component of the legislation, which was signed into law on March 27, is a plan to issue recovery rebates, or what’s widely being referred to as stimulus checks, stimulus payments or economic impact payments.

The rebates are set up as a tax credit against an individual’s federal income tax obligation. If you qualify for the credit, the rebate payment is automatic — you won’t have to claim a credit on your tax return to get it.

How much is the rebate?

The rebate amount is $1,200 for individuals and $2,400 for couples who file a joint tax return. Plus, up to an extra $500 is available per qualifying child.

But the rebate is reduced starting at a certain income level and completely phases out for people whose incomes exceed the limit for the credit.

What are the income limits for the rebate?

Not everyone will get a stimulus check. The credit is reduced by 5% of the portion of adjusted gross income that exceeds the AGI limit until it phases out completely for higher earners. If that sounds confusing, here’s a breakdown of how the phase-out thresholds for the rebate amount work.

A word about AGI

If you’ve already filed your tax return for 2019, the IRS will base your rebate amount on your AGI for 2019. If you haven’t yet filed a 2019 return, your AGI from your 2018 return will be the basis for calculating your rebate. And if you don’t file a return but receive Social Security benefits (for example, if you’re a senior), the IRS can use information from your Social Security Benefit Statement to calculate the amount of your coronavirus stimulus check.

How can I get a stimulus payment?

If you had a federal tax refund directly deposited into your bank account for 2018 or 2019 and you qualify for a rebate, you probably won’t have to do anything to get it. The IRS will use your direct deposit information to make a direct payment of the rebate amount. Of course, the account must still be active in order to receive deposits.

If you didn’t have a refund directly deposited in the past two tax years, you’ll likely get a paper check from the IRS. The IRS will mail it to the last address on file for you, so it’s important to update your address with the IRS if you’ve moved since the last time you filed a tax return.

The IRS has also said the Treasury department will be creating a web portal to allow people to provide their banking information to the IRS online so they can receive their payments immediately instead of waiting for a check in the mail.

When will I get my payment?

Treasury Secretary Steven Mnuchin told CNN on March 26 that the White House is pushing to get stimulus payments issued by April 6. But the last time the federal government issued stimulus checks — in 2008 during the Great Recession — it took months for Americans to receive them.

On March 30, the IRS said in a news release that it expected to begin distributing payments within the next three weeks.

What if I don’t make enough to file taxes?

Some Americans don’t have to file income tax returns because they don’t make enough money. Most people younger than 65 who make less in a year than the standard deduction amount for their filing status won’t be required to file a federal income tax return.

For example, for 2019 taxes, single filers younger than 65 with a gross income of less than $12,200 wouldn’t be required to file a federal income tax return. Of course, they can still file if they’ve had federal income tax withheld from their paychecks or are eligible for a refundable credit and want to get a refund.

But if you weren’t required to file for 2018 or 2019, wouldn’t have filed for any other reason, and didn’t receive Social Security benefits in 2019, you don’t have to file just to get your stimulus payment. The IRS has launched a free online portal for non-filers. You can provide information that will allow the IRS to determine your eligibility and payment amount and send a payment if you qualify for one.

How can I check on a rebate?

The relief package that created the recovery rebates directs the IRS to mail rebate notices to individual taxpayers no later than 15 days after distributing a rebate. The notice must detail how the rebate was paid (electronic payment or paper check, for example), the amount of the rebate and a phone number to call if the taxpayer didn’t receive the payment.

What’s the catch?

There are some restrictions in the stimulus bill.

• People with higher incomes won’t get any rebate or will have their rebate amounts reduced.
• While the legislation provides up to $500 for each qualifying child, there’s no allowance for other dependents. For example, a qualifying married couple who claim both their child and an adult parent as a dependent would get up to $500 for their child but nothing for the parent.
• Generally, you must have a Social Security number to get the credit.
• If you owe back child support, your stimulus payment may be offset to pay that debt (though payments won’t be reduced for other typically offsetting government debts).
• The deadline for claiming your rebate is Dec. 31, 2020.
• It may take a while to get your check.

Bottom line

The U.S. government passed the CARES Act to help stimulate the economy and offset the financial impact of the coronavirus pandemic. Stimulus checks are a part of the legislation that aims to help individual Americans. But not everyone will get a rebate — you have to meet income requirements to qualify for it.