THE WANDERING TAX PRO
Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 45+-year veteran tax professional Robert D Flach.
Thursday, March 26, 2020
RECOVERY REBATE CHECK
Here is what I understand about
the new check that will soon be sent to Americans.
The newly passed CARES Act to
provide economic assistance during the pandemic will give many Americans a “2020
recovery rebate” check - $1,200 for single Americans and $2,400 for couples,
with an additional $500 per dependent child under age 17.The check will be based on your 2019 tax
return, or if not filed your 2018 return or your 2019 SSA-1099.It is administered via new Internal Revenue
Code Section 6428.
The payment phases out once
your Adjusted Gross Income (AGI) exceeds $75,000 if single or $150,000 if
married. Once over those thresholds, you’ll lose $5 of your payment for every
$100 your AGI exceeds those thresholds.
It will be treated as an “advance
credit”, like the Obamacare advance
premium credit, and must be reconciled, again like the advance premium
credit, based on 2020 informationwhen preparing your 2020 tax return next
year.If you are entitled to more of
a credit than you received you can claim the additional credit on your 2020
return.If you received more than you
should have it is unclear at this point what you would do.