IRS Letters, Stimulus 2.0, and More
Every day, I put on my CPA hat to give you the latest stimulus news.
Here is my daily stimulus update for April 9, 2020, in the morning.
If you’d rather watch than read, check out the YouTube video below!
1. IRS Letters
The IRS has said that it plans to mail a letter about the economic impact payment to the taxpayer’s last known address within 15 days after the payment is paid.
The letter will provide information on how the payment was made and how to report any failure to receive the payment.
If a taxpayer is unsure they’re receiving a legitimate letter, the IRS urges taxpayers to visit irs.gov first to protect against scam artists.
Like I’ve covered in other videos, there are lots of scammers right now, and I’m sure that scammers will put out spoof letters trying to scam you.
Think about it.
There’s a lot of confusion right now about these stimulus payments and the timing of them.
Some people — it looks like — are going to get their payments as early as next week.
So if some uninformed person hears, “Hey, my friends and my sister and my brother, they all got their checks, and I didn’t” — and they don’t realize it’s because the IRS doesn’t have their direct deposit information — but next thing they know they get an official-looking letter in the mail saying, “Oh, here’s how to get your stimulus check — just fill out this form with your name and social security number and everything about you, and mail it back.”
Obviously scammers can’t hit up everybody, but I’m positive that there will be mail scams imitating this IRS mailing.
2. Stimulus Timing
I’m not going to spend too much time on this because I released a video yesterday evening with what I understand is the most reliable timeline right now.
Spoiler: Secretary of the Treasury Mnuchin reportedly said next week for the first recipients who filed a 2018 and/or 2019 tax return with direct deposit.
I saw something in a local publication this morning saying that a local Illinois state senator says she was on a call yesterday with Trump where it was stated that payments will start being distributed Wednesday, April 15.
I’m not really seeing anybody else report this, but nevertheless I have no reason to believe this state senator is lying.
And of course Representative Dingell from Michigan published an article on her blog yesterday something very consistent with this.
So at this point I think we can be fairly confident that next week is the week when the first payments will roll out to direct deposit recipients who have filed a 2018 and/or 2019 tax return with direct deposit information on it.
3. No IRS Portal Yet
Here’s to another day without an IRS portal in sight.
Wasn’t a primary purpose of the portal for people to be able to tell the IRS their direct deposit information before the IRS releases the direct deposits?
OK, so IRS — are we gonna get the portal this week? It’s already Thursday, and direct deposit is supposedly dropping next week.
Do you want your website to crash when hundreds of thousands if not millions of people go to your portal at the same time to give you their information?
I think you do.
4. Stimulus 2.0 (or Rather Stimulus 1.5)
I’ll tell you what I mean by 1.5.
So it’s been exactly 13 says since Trump signed the CARES Act, and already various lawmakers are talking about another stimulus package.
I touched on this in my stimulus update yesterday morning, but some more details have emerged since then.
Not really details (because pen hasn’t been put to paper yet at least with respect to drafting an actual bill), but this is interesting to say the least.
So Speaker of House Nancy Pelosi and Senate Democratic Leader Chuck Schumer issued a statement about an interim emergency legislation — let’s call this Stimulus 1.5 — as basically a precursor to a second “big” Stimulus 2.0.
I’ll get to the numbers and all that that they have for the interim emergency legislation, but for context, you’ll remember that in the Democrats’ version of the stimulus bill, Speaker Pelosi wanted $1,500 for every American with a social security number — including children and infants — but capping the number of children per household at three.
So a household with, say, two adults and three children — that’s five people with Social Security numbers — would receive $7,500.
Eventually what was passed of course was a modified version of the Republican bill, which is what we have rolling out right now with the $1,200 and $500 per child.
Anyway, Pelosi and Chuck are now calling for a $500 billion interim emergency legislation. Here’s what’s in this grab bag that as of right now only exists in their mind:
- $250 billion in assistance to small businesses with half of that going to community-based financial institutions for particular business enterprises, namely those owned by veterans, minorities, women, etc.
- $100 billion for hospitals, community health centers, and health systems currently at the front lines of this crisis
- $150 billion for state and local governments to manage this crisis
- And finally, a 15% increase to the maximum SNAP benefit i.e. food stamps
Nothing was said of direct cash payments in their most recent statement, and I suspect that’s because they want to save that for Stimulus 2.0.
5. TaxAct Stimulus Edition
TaxAct has released a stimulus edition.
If you don’t know what TaxAct is — it’s a poor man’s TurboTax.
But it doesn’t really matter in this case because both of their stimulus editions are free.
Am I going to do a walkthrough of this TaxAct stimulus edition like I did a walkthrough of the TurboTax one?
No, not unless a lot of people ask for it.
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Logan. Jhon here from NY. Does the IRS actually need to have our direct deposit information to hand out the stimulus cash? Or will they just send a check to the mail if they dont have our info?.
Thanks
Hi John. If you filed a 2018 and/or 2019 tax return — or if you are on Social Security retirement, Railroad Retirement, or SSDI even if you didn’t file a 2018 and/or 2019 tax return — you’re good, even if no direct deposit information was on your tax return. The IRS will just mail you a check. However, if you are in any other group that didn’t file a 2018 and/or 2019 tax return — your income was too low, you’re on SSI, etc. — you will need to file a simple 2019 tax return in order to get the stimulus OR wait for further IRS clarification on the matter. If you just want to get it over with, you can file a 2019 tax return using the Turbotax “stimulus edition”.
I want to file my taxes. Age 69 in March, only income is Social Security.
Hi Monica. If you receive Social Security retirement, you don’t have to file your taxes to receive your $1,200 stimulus. However, you may want to file if you have a dependent child under the age of 17 in order to get the additional $500 benefit. You may also want to file to give the IRS your direct deposit information (or wait for the IRS portal to roll out). If you still want to file, you can use the TurboTax “stimulus edition”.