The information in this article was last updated on Sept. 25, 2021. This article relates to the tax laws enacted during the COVID-19 pandemic, specifically the first round of Economic Impact Payments. These laws may have expired or reverted to their original state.
- Your clients’ deadline to claim their $500 Economic Impact Payment for their qualifying child is Wednesday, September 30, 2020.
- Your clients’ deadline to register to receive the Economic Impact Payment is Thursday, October 15, 2020.
- If your client misses either of the above deadlines, they will need to claim the EIP as a credit on their 2020 federal tax return.
President Donald Trump signed the CARES Act, or Coronavirus Aid, Relief, and Economic Security Act, into law on Friday March 27th, 2020. This $2 trillion relief package will provide millions of eligible Americans with a direct payment to help offset the financial burden of the COVID-19 outbreak.
Your clients will likely have a lot of questions about what this means for them. There is conflicting information online that may confuse them. You are their trusted resource for tax and stimulus information. Here are six tips you can give your clients to ensure that they receive their stimulus check as soon as possible.
6 stimulus check tips for your clients
1. Encourage your clients to file their 2019 taxes now
The government will first look at your client’s 2019 return to determine if they are eligible to receive a stimulus check. If you have not filed your client’s 2019 return, encourage them to send you their forms and documents so you may file their taxes as soon as possible.
If they have not filed their 2019 return and are not ready to send you their info, the government will look at their 2018 tax return.
If your client hasn’t filed in the past two years, the IRS recommends that they file their 2018 or 2019 return now. You can file your client’s previous year return using TaxSlayer Pro.
2. Check to see if your client qualifies for a stimulus check
Your client will need to meet the following requirements to be eligible for a stimulus check:
- They must have filed a tax return for tax year 2018 or 2019
- Their AGI on the most recent tax return filed (2018 or 2019) must be below the threshold for their filing status (see more detail below)
- They must be a U.S. citizen or a resident alien who has a valid Social Security Number
- They must not be claimed as a dependent on someone else’s tax return*
For more information about stimulus payments, read the IRS’s Economic Impact Payment FAQ.
3. Calculate how much your client will receive on their stimulus check
According to the CARES Act, the amount your client will receive is determined by their AGI and tax filing status. The government will look at either their 2019 or 2018 tax return for this information.
TaxSlayer Pro has developed an online stimulus calculator that you can use to estimate your client’s Economic Impact Payment for them. Or you can help your client calculate their stimulus check using the following formula:
- Determine your client’s maximum stimulus payment.
- $2,400 for married filing jointly. $1,200 for all other filing statuses.
- Add $500 for each qualifying child*
- See if your client’s AGI exceeds the threshold for their filing status.
- Single, married filing separately, qualifying widow(er) – AGI above $75,000
- Married filing jointly – AGI above $150,000
- Head of household – AGI above $112,500
- If their AGI exceeds the threshold, move on to the next step.
- If their AGI is below the threshold, they receive the maximum amount from the first step.
- Subtract the threshold amount for their filing status from your client’s AGI.
- Multiply this new number by 5%.
- Subtract this number from the amount calculated in the first step. This amount is your client’s stimulus payment.
Or you can send your client this chart to help them see if they fall below the threshold and will receive the full amount.
|Filing status||AGI amount||Stimulus check amount|
|Single||$75,000 or less||$1,200|
|Married filing jointly||$150,000 or less||$2,400|
|Head of Household||$112,500 or less||$1,200|
|Married filing separately||$75,000 or less||$1,200 per spouse|
|Qualifying widow(er)||$75,000 or less||$1,200|
|Dependents under 17*||N/A||+$500|
4. Let your client know when and how they can expect to receive their stimulus payment
Your client will receive the stimulus payment in one of two ways: direct deposit or a check mailed to their home address. If they did not sign up for direct deposit on their most recent tax return, their check will be mailed to their address on their most recent tax return.
The Department of Treasury Secretary Steven Mnuchin said he expects most people to receive their payment within three weeks if they are receiving it through direct deposit, which would be by April 17th.
It will take longer for your clients who aren’t set up for direct deposit to receive their checks by mail.
5. Help your clients sign up for direct deposit through the Department of Treasury
If your client wants to send their bank information to the IRS so they can receive direct deposit instead of a check, send them to the IRS’s Get My Payment Tool. Here they can check their payment status, confirm the delivery method (direct deposit or check), and enter their current bank account information.
6. Assist your clients if they don’t receive their stimulus check
If your client doesn’t have the same bank account as the one used on their most recent tax return, the deposit will not go through. If this happens, the IRS will mail their check to the address on their most recent tax return.
Your client should receive a notice in the mail between 2-3 weeks after their payment has been disbursed indicating how the payment was delivered and where the payment was sent. If your client still can’t locate their payment, help them contact the IRS using the information provided on the notice.
*Further clarification on qualifying dependents
- If a person was claimed as a dependent on the most recently filed tax return (2018 or 2019), either as a Qualifying Child or Qualifying Dependent, they are ineligible to receive the $1,200 payment.
- If the person is under age 17 and they meet the definition of a Qualifying Child and were eligible for the Child Tax Credit, the additional $500 will be sent to the taxpayer that claimed the child. This may or may not be their legal guardian.
- Dependents under age 17 that are ITIN holders are not considered a Qualifying Child for this purpose.
- Qualifying Children that are age 17 or 18 (or full-time student through age 24) also do not qualify for the $500 stimulus payment.
Read TaxSlayer Pro’s Questions and Answers on the CARES Act Stimulus Package Bill for more information.
If you are interested in learning more about the CARES Act, TaxSlayer Pro’s partner Surgent CPE is offering a live webinar.
Get additional COVID-19 and Stimulus tax resources for tax preparers here.