By Emmanuel Olawale, Esq.

Over three million American employees filed for unemployment compensation benefits during the week of March 16, 2020.  This is an indication that millions of Americans are under financial stress because of the corona virus pandemic and resultant shutdowns.

In response to the looming financial outlook, a $2 trillion stimulus package was signed into law the following week to provide financial relief for struggling American taxpayers.

The question now is how would this stimulus package affect the average American tax taxpayer?  This article will focus only on individuals who are employees, self-employed and 1099 contractors.  It won’t address the package in regard to corporations and businesses.

Who is eligible to receive checks under the law?

Any adult with a valid social security number, who resides in the United States and who filed their taxes in 2018 or 2019 regardless of their immigration status.  American citizens, permanent residents, anyone with valid work authorizations and social security number who filed their taxes in 2018 or 2019.  So, for instance, DACA recipient, employees with valid work visas are eligible to receive stimulus checks even though they are neither American citizens or permanent residents.

Undocumented immigrants who filed their taxes using Tax Identification numbers will not receive a check under the bill because they do not have valid social security numbers.

Anyone who was claimed as a dependent on 2019 taxes, regardless of their age would not receive a check. Also, anyone who is owing child support will not be eligible.

Which year’s income will be used to determine qualification?

Your 2019 gross adjusted income will be considered if you have already filed your 2019 tax returns. If you haven’t then, 2018 income would be used.

How much would an individual receive?

Most adults would get a check of $1,200.  Parents will receive additional $500 for each qualifying child under the age of 16.  For instance, qualifying parents with two children under the age of sixteen will receive additional, $1,000.

The stimulus check is going to be distributed based on income, so some people will not be receiving checks, while some will receive checks with lower amounts.

An individual with adjusted gross income of $75,000 or less will get $1,200.00

Married couples with no children with adjusted gross income of $150,000 or less will receive $2,400.00

An individual who filed as Head of Household with income of $112,500 or less will receive $1,200.00.

The payment will reduce as your income increases starting at $75,000 for individuals and $150,000 for couples. You will lose $5 on every $100 for income you make that exceeds $75,000.  For instance, an individual who makes $85,000 will receive $700.  An individual who makes $90,000 will receive $450.00.

Who are those tax payers that would likely not get a check?

1. 1. A single individual who earned $99,000 or more,
   2. Married couple with no children and who earned $198,000 or more,
   3. Married couple with at least two children who earned over $218,000
   4. Anyone regardless of age who was claimed as a dependent on someone else’s taxes, even if they filed their own taxes.
   5. Anyone who is owing child support.

Would I get a check if I am owing back taxes?

Yes.

What is the application process?

There is no application to complete.  The Internal Revenue Services (IRS) will either mail your check to your last known address or send your money to you through direct deposit to the account you provided when you filed your taxes.

When will I receive a check?

A check will be mailed to you within three weeks.  If you provided a bank account to the IRS in your most recently filed returns, your money will be directly deposited into your account within three weeks.

For individuals who have filed for unemployment compensation because of the pandemic or those with existing claims prior to the bill, the federal government will give them additional $600 per week on top of the state’s benefit. For instance, if your state’s weekly benefit is $500, you will receive $1,100.00.

Self-employed individuals and 1099 employees can also file for unemployment compensation. They will also be eligible for the additional $600.

I receive Social Security benefits, would I receive a check?

Yes, social security income or benefits will not preclude you from receiving a check from the stimulus as long as your income is below the threshold.

Emmanuel Olawale is the principal of The Olawale Law Firm and the author of “The Flavor of Favor: Quest for the American Dream. A Memoir.”  He can be reached at info@olawalelaw.com and 614-772-4177.