En español | A number of misconceptions are flying around about the $1,200 stimulus payments called for under the CARES Act. Here's a closer look at a dozen of these erroneous claims surrounding what the Internal Revenue Service (IRS) refers to as economic impact payments. Consider yourself warned.
1. Donald Trump signed the stimulus checks
Millions of paper stimulus checks issued by mail do bear the president's name but not his signature. The checks are actually signed by Vona Robinson, an official with the Treasury Department's Bureau of the Fiscal Service. The president's name does, however, appear in all caps on the face of the stimulus checks, next to the image of the Statue of Liberty. If you receive a stimulus check with Donald Trump's signature, it's a fake.
2. You had to file a tax return to get a stimulus payment
Absolutely not. While stimulus-payment eligibility for many was based on 2018 or 2019 tax returns, the IRS went to great lengths to ensure that those not required to file tax returns also got their checks. At the urging of AARP, the IRS worked closely with the Social Security Administration (SSA) and the Department of Veterans Affairs (VA) to make sure that non-filers who received benefits from SSA — including benefits for survivors, the disabled (SSDI) and Supplemental Security Income (SSI) recipients — or the VA got a check. It also rolled out a tool on irs.gov called, logically, “Non-Filers: Enter Payment Info Here.” Don't use the tool if you intend to file a 2019 return, due by July 15.
3. The IRS will garnish your payment for back taxes
The IRS says it will not take all or part of your stimulus payment for back taxes. If you owe back child support, however, your state will report you to the Treasury Offset Program (TOP), which can take your entire stimulus check, up to the amount you owe. If you're married to someone who owes child support (and you don't), you can file an injured spouse form. This can allow you to keep the portion of the stimulus that doesn't belong to your spouse.
4. You owe income tax on your stimulus payment
Nope. To quote the IRS coronavirus economic impact information center: “No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer's refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.”
5. College students aren't eligible for stimulus payments
As long as you're 17 or older and aren't claimed as a dependent on someone else's tax return, you're eligible for a stimulus check. Whether or not you're in school doesn't matter. You must also meet the income requirements. To receive a full $1,200 stimulus payment your adjusted gross income (AGI) must be at or below $75,000 for individuals and $150,000 for married couples filing joint returns. Most college students won't have to worry about this. What they do have to worry about is being claimed as a dependent by their parents. That negates their eligibility to receive a stimulus check.
6. It's too late to get a stimulus check
The IRS has already pushed out 140 million stimulus payments, either by paper check, direct deposit or prepaid debit card. Nevertheless, some people who were entitled to a stimulus payment haven't gotten one, possibly because their income was too low for them to file taxes. The IRS will continue to make payments in 2020. To get your payment, use the Non-Filers: Enter Payment Info Here tool. If you don't receive a payment this year, or your payment is in the wrong amount, you can claim the missing money when you file a tax return for 2020 next year.
7. Millionaires qualified for stimulus payments
This one is tricky. Anyone with an annual income of $1 million certainly did not get a stimulus payment. Far from it. Eligibility for stimulus payments phased out once AGI hit $99,000 for individuals and $198,000 for couples filing jointly. There is, however, no criteria surrounding net assets. So, for example, a retiree who had little income but substantial assets such as a home and retirement accounts could qualify.
8. You need a bank account to get a stimulus payment
Not true. Stimulus payment are being distributed by paper check and prepaid debit card, in addition to direct deposit into a bank account. Still, the IRS strongly urges you to get your stimulus payment via direct deposit, which not only arrives faster than a check, but is more secure as well. If you don't have a bank account, the Federal Deposit Insurance Corp. can help you find one.
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9. Your stimulus check will reduce your 2020 tax refund
The stimulus payment you get is technically an advanced refundable tax credit for 2020. Tax credits reduce your tax bill dollar for dollar. The refundable part means that you get the full value of the credit, even if you don't owe as much as the credit. If you have a $600 tax bill and a $1,000 refundable credit, you'll get a check from Uncle Sam for $400 (1,000-600=400). But this tax credit comes after all your credits and deductions for 2020, meaning that it will only increase your tax refund if you're eligible, and never lower it.
10. All dependents receive a $500 stimulus payment
Unfortunately, that's not true. Only dependent children under age 17 are eligible for a $500 stimulus payment, made payable to the person who claims them as a dependent. Anyone 17 or older listed as a dependent on someone else's tax return won't qualify for the $500 payment. That goes, as well, for an aged parent declared on their child's tax return.
11. You can't get a stimulus payment if you don't live in one of the 50 states or Washington, D.C.
False. U.S. citizens living abroad are eligible for stimulus payments. The same is true for eligible residents of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. However, payments to residents of U.S. territories are being administered by local tax authorities, not the IRS.
12. Relatives can keep stimulus payments sent to dead people
While some payments have gone out to the deceased, heirs can't keep the money. The IRS announced that stimulus checks sent to the dead must be returned to the government.