April 8 Stimulus Check Update

Stimulus Update 4/8/20

Here is the April 8 stimulus check update.

If you’d rather watch than read, check out the YouTube video below!

1. Stimulus 2.0

Speaker of the House Nancy Pelosi said, “We must double down on the down payment we made in the CARES Act by passing a CARES 2 package, which will extend and expand this bipartisan legislation to meet the needs of the American people.”

She goes on to say that this stimulus 2.0 must go further to help small businesses, expand unmeployment payments, and — yes — cut more direct payments to the American people.

She also talks about everybody, really — state and local governments, hospitals, health workers, and more.

Also, New York Senator Chuck Schumer has called for up to $25,000 in “heroes pay” for front-line health care and service industry workers.

Big corporations would probably have to foot this bill themselves, while small businesses would likely get federal funds to do it.

Again, at this point, this is just an idea, there’s no bills being drafted yet.

Now, I am definitely not opposed to additional stimulus packages at all — God knows we need them — but let’s please figure out this first one first.

2. When Are Stimulus Payments Going Out?

There was the memo that various House Democrats supposedly saw last week, which said direct deposits the week of April 13, and paper checks start going out the week of May 4.

Then Secretary Mnuchin in the press conference said, no, no, no — checks will go out in a matter of weeks, but then he also said but we really want as many people on direct deposit.

And then the Washington Post threw its hat in the ring and said that they saw some plan that said direct deposits would hit on April 9, which is tomorrow by the way.  If you get your direct deposit tomorrow, please comment on this video.

That said, Larry Kudlow, Director of the U.S. National Economic Council, the NEC, said this week, “The checks from the Treasury and the IRS probably start going out…I think this week, perhaps early next.”

Notice the qualifying words there: “I think” and “perhaps.”

Now, if Larry Kudlow, Director of the NEC — which is the government agency that provides economic policy counsel to the president — if he has to use words like, “I think,” and “perhaps,” what does anybody really know regarding the timing?

The one thing I do know is that if you’re on direct deposit with the IRS, you will be getting your stimulus a lot faster than those receiving paper checks, OK.

3. Who Still Has to File a Simple Tax Return?

As of right now, April 8, the IRS has not put up its own portal for those who normally don’t file a tax return, so apart from those who receive Social Security benefits and are issued a Form SSA-1099 — and that includes Social Security recipients as well as SSDI and Railroad Retirement — everyone else who wouldn’t otherwise file a tax return has to file a simple tax return in order to receive their stimulus benefits.

Now, currently, SSI and Veterans Benefits recipients have to file a simple tax return.

There is currently nothing on the IRS website or anywhere else that states, beyond the shadow of a doubt, that SSI recipients and Veterans Benefits recipients don’t need to take further action.

The IRS might come back later because everyone’s pressuring them and say, “That’s what we meant the whole time,” but as of right now, SSI and Veterans benefits to have to file a simple tax return or wait for the IRS portal.

Of course, this could very well change, and I hope it does, and it probably will because everyone is on Treasury’s butt to fix this.

4. How Can You File a Simple Tax Return?

So if you aren’t required to file a 2018 or 2019 tax return, but you still need to file your simple tax return for stimulus purposes, you have four options:

1. Wait for more guidance from the IRS on this.
2. Download and print the paper Form 1040.
3. Use IRS Free File.
4. Use the TurboTax stimulus edition, this is what I’m calling it, I created a video on that this past Saturday when it rolled out.  You can use that to file a simple 2019 tax return.

5. What If I Already Filed My 2018 and 2019 Tax Returns, but My Direct Deposit Information Wasn’t On There?

You have two options in this situation:

1. Do nothing and wait for a physical check in the mail, which could take significantly longer than direct deposit.
2. Wait for the IRS portal to roll out where you can update your direct deposit information with the IRS.

Do not file a simple tax return, that is, do not use that TurboTax “stimulus edition,” if you’ve already filed your 2019 tax return because it won’t.

Now, it might work temporarily if somehow the IRS hasn’t processed your 2019 return you previously filed, but it could screw things up because if you file an additional turn through TurboTax stimulus edition, it could mess you up in the system because you already have a 2019 return filed.

6. Do I Have to Pay Back My Stimulus Check?

No, the stimulus payments are technically an advance payment of a brand new refundable tax credit for your 2020 tax return, the return that you will file next year, in 2021.

But instead of just giving you this tax credit on your 2020 tax return that you’ll file next year in 2021, the government is saying, “OK, we can advance the credit to you, pay you before you file your 2020 tax return, pay you now, not literally now, but whenever the IRS gets its act together issuing these stimulus payments.”

So that’s what these stimulus payments are, they’re the IRS paying you in advance a 2020 tax credit.

Don’t misunderstand this.

It’s not like, oh, you would have only gotten a $2,000 refund without the stimulus credit, but because you get a $1,200 credit, your refund next year is only $800.

No, no, no.

If the credit didn’t exist, and you would be owed, say, a $2,000 refund on your 2020 tax return, now, with this additional credit, your overpaid tax on your 2020 tax return would be $3,200, except you got $1,200 in advance, now, or whenever the IRS gets its act together, and you’ll still get that $2,000 refund on your 2020 tax return you would have received if the stimulus had never happened.

So no, you don’t have to pay it back.  Your stimulus, insofar as you’re eligible for it, and you’re not trying to defraud the government here, I’m talking to good, honest Americans here, insofar as you’re eligible for the stimulus, and you receive it, it does not hurt you on your 2020 return, you don’t have to “pay it back.”

And, moreover, if you receive less stimulus money this year, in 2020, less stimulus money than you’re entitled to, you will get the stimulus you were entitled to as a credit on your 2020 tax return that you will file in 2021.

This could happen if let’s say your 2018 income was over the stimulus threshold, but your 2019 and 2020 income was under the stimulus threshold, but you haven’t filed 2019 yet for whatever reason.

So what happens?  IRS looks at your 2018 return and says ah, this individual is not eligible for a stimulus check.

But you actually are eligible based on your 2019 return, but you just haven’t filed it yet.

So if this is the case, if you don’t receive the full stimulus you’re eligible for in 2020, you will receive as a tax credit on your 2020 tax return whatever stimulus you were owed based on your low, in this case 2019, income but that you didn’t receive as stimulus payment in 2020.

So while everyone else got their tax credit in advance in the form of a stimulus payment, you’re just going to have to wait until 2021 when you file your tax return to get it.