In my unusual weekly email format, here is Part 2 of the CARES Act as it relates to ODs. But this email probably won't be relevant to you. Most ODs I work with don't qualify for what I cover here- the cash payments to individuals- but your much of your staff probably does, as well as friends and family. My hope is that this can help them and please feel free to forward this on.
What are the payments?
Individuals with AGI (adjusted gross income) of $75,000 will get $1,200. Individuals who make between $75,000 and $99,000 are eligible for a phased out amount. Couples making less than $150,000 should received $2,400. Between $150,000 and $198,000 is phased out.
Families who are below the above phaseout thresholds and have children 16 or younger should get an additional $500 per child. I have a lot of clients with college aged kids—please note even if they do file their own tax return, if they are claimed as a dependent on a parent’s return, they are not eligible. Generally speaking students aged 24 or younger are considered dependents if a parent pays half their expenses. And you may have noticed if you have a student between the ages of 17 and 24, they probably will not benefit from this stimulus program.
How do I apply for my payment?
As of right now, there’s no application. These payments are to be distributed through the IRS, estimated in 2 to 3 weeks. They will look to 2019 tax returns, and if none is available, 2018 tax returns and distribute checks based on the AGI from those returns.
Practice Owners: you would be shocked (or not) to know how many people don't file taxes on time. $1,200 is real money- even a mortgage or rent payment!- so encourage your staff to file if they haven't and offering to provide a copy of any practice-issued tax documents they might have lost can help encourage them to file.
If you paid through your bank account, you should expect your cash payment to arrive into your bank account. Alternatively, if you mailed a check or received a refund check, expect your check in the mail. One quick note: the last time stimulus checks were mailed (2008), it took two months for the paper checks to go out.
Really Important:
1- Unless on social security and not required to file taxes, taxpayers MUST have filed a 2019 or 2018 return to get their check. I’m sure there will be a process for non-filers to go through later, but if this money is important, taxpayers need to a 2019 OR 2018 file returns in the system as soon as possible (I suggest before Wednesday when the CARES Act goes into effect). The IRS has several free filing options available HERE
2- If you’ve moved since 2018, either file your 2019 returns with the correct address asap OR check back on the IRS’ Coronavirus page for further instructions
3- Same note as above if you’ve changed bank accounts since your last tax return
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