COVID-19 Stimulus Payment Issue

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Topic Author
rickwmm
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COVID-19 Stimulus Payment Issue

Post by rickwmm » Wed Apr 01, 2020 4:32 pm

I haven't seen this issue addressed anywhere. The rules state that if you have filed your 2019 federal return, you determine eligibility for a COVID-19 relief check based on 2019 income; otherwise, it's based on 2018 income. My son has a situation which I am sure must be fairly common. He qualifies for a payment based on his 2018 income but will not qualify based on his 2019 income. Fortunately, he hasn't filed yet for 2019, so I guess he will receive a check. But it creates what seems like a major inequity, as many people who filed early in 2019 will be deprived of a check but would have gotten one if they delayed filing.

It seems to me the only way this can be resolved fairly is to say that if you received a check based on 2018 income which you would not have deserved based on 2019 income, you will have to pay it back on your 2020 return. But no one is saying this, which strikes me as odd.

This doesn't even address the situation of 2020 income. Many people who didn't qualify based on 2018 or 2019 income may indeed qualify in 2020 due to COVID-19 related lost wages. I assume that will be taken care of on their 2020 return. But the reverse situation may also be true. Some people who qualified in 2018 and/or 2019 may suddenly not qualify in 2020 simply due to making more money in 2020. Again, I wonder if these people will have to pay back what they received on 2020 return.

Am I missing something here? Has this issue been addressed yet?

Silk McCue
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Re: COVID-19 Stimulus Payment Issue

Post by Silk McCue » Wed Apr 01, 2020 5:00 pm

It’s not going to be addressed. There is no way to make this perfectly equitable without making the implementation more complicated and costly.

People will not have to pay it back if their income was greater in 2019 or 2020 as determined after the fact.

Unfortunately, life isn’t fair.

Cheers

livesoft
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Re: COVID-19 Stimulus Payment Issue

Post by livesoft » Wed Apr 01, 2020 5:02 pm

Listen to the Bogleheads' podcast mentioned in this thread:
viewtopic.php?f=10&t=310416

Or have your son listen to it. It's his money.
Wiki This signature message sponsored by sscritic: Learn to fish.

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Kenkat
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Re: COVID-19 Stimulus Payment Issue

Post by Kenkat » Wed Apr 01, 2020 5:07 pm

I have a similar situation where my son qualifies based on his 2018 return. He has not filed in 2019 but I have already filed in 2019 and claimed him as a dependent in 2019. So I don’t know if they will look at his return in 2018 and he will receive a payment or if he will be excluded based on my 2019 return. I’m just going to wait and see what happens at this point since I haven’t really seen this situation addressed.

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willardx
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Re: COVID-19 Stimulus Payment Issue

Post by willardx » Wed Apr 01, 2020 5:28 pm

To add to the life isn't fair scale, I read today that a lot of 17- and 18-year-olds won't get any money (unless maybe they file separately from their parents, and not as a dependent), regardless of low income or not.

Paradise
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Re: COVID-19 Stimulus Payment Issue

Post by Paradise » Wed Apr 01, 2020 5:34 pm

Not sure if it’s appropriate to hijack but also what about the opposite? We qualify for a check with 2019 income but not 2018 and also have an additional dependent. I immediately mail filed my taxes last week when I heard this was becoming a likely situation, but it seems like I’m not guaranteed they use my 2019 return depending on when they run the algorithm ? Any chance to appeal if they use 2018 by mistake?

Silk McCue
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Re: COVID-19 Stimulus Payment Issue

Post by Silk McCue » Wed Apr 01, 2020 6:09 pm

Paradise wrote:
Wed Apr 01, 2020 5:34 pm
Not sure if it’s appropriate to hijack but also what about the opposite? We qualify for a check with 2019 income but not 2018 and also have an additional dependent. I immediately mail filed my taxes last week when I heard this was becoming a likely situation, but it seems like I’m not guaranteed they use my 2019 return depending on when they run the algorithm ? Any chance to appeal if they use 2018 by mistake?
File electronically now. I can’t fathom filing paper these days.

Cheers

brokendirtdart
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Re: COVID-19 Stimulus Payment Issue

Post by brokendirtdart » Wed Apr 01, 2020 6:53 pm

rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
fairly
willardx wrote:
Wed Apr 01, 2020 5:28 pm
fair
There was never anything fair about this. It is purely a wealth redistribution move.

pshonore
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Re: COVID-19 Stimulus Payment Issue

Post by pshonore » Wed Apr 01, 2020 6:54 pm

You'll be getting a check in the next few months based on your 2018 return or 2019 if filed. The credit will also be refigured in 2021 based on 2020 numbers at which time if you qualify for more you will get it. If you qualify for less, you do not have to repay the previous excess. I don't know what will happen if a parent gets $500 for a child and the child later qualifies for their own credit in a later year. My guess is they won't pay twice for the same SS#.

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8foot7
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Re: COVID-19 Stimulus Payment Issue

Post by 8foot7 » Wed Apr 01, 2020 7:17 pm

rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
I haven't seen this issue addressed anywhere. The rules state that if you have filed your 2019 federal return, you determine eligibility for a COVID-19 relief check based on 2019 income; otherwise, it's based on 2018 income. My son has a situation which I am sure must be fairly common. He qualifies for a payment based on his 2018 income but will not qualify based on his 2019 income. Fortunately, he hasn't filed yet for 2019, so I guess he will receive a check. But it creates what seems like a major inequity, as many people who filed early in 2019 will be deprived of a check but would have gotten one if they delayed filing.

It seems to me the only way this can be resolved fairly is to say that if you received a check based on 2018 income which you would not have deserved based on 2019 income, you will have to pay it back on your 2020 return. But no one is saying this, which strikes me as odd.

This doesn't even address the situation of 2020 income. Many people who didn't qualify based on 2018 or 2019 income may indeed qualify in 2020 due to COVID-19 related lost wages. I assume that will be taken care of on their 2020 return. But the reverse situation may also be true. Some people who qualified in 2018 and/or 2019 may suddenly not qualify in 2020 simply due to making more money in 2020. Again, I wonder if these people will have to pay back what they received on 2020 return.

Am I missing something here? Has this issue been addressed yet?
I complained about this in a thread over the weekend. I have to think this will be adjusted in future legislation, as it is a huge loophole worth in some cases several thousand dollars.

freight_train
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Re: COVID-19 Stimulus Payment Issue

Post by freight_train » Wed Apr 01, 2020 9:35 pm

How about this: two spouses, one died 2 weeks ago. They filed MFJ for 2018 and just filed for 2019. I strongly suspect 2 $1200 payments are coming. Does the surviving spouse get to keep them both?

Topic Author
rickwmm
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Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Wed Apr 01, 2020 10:10 pm

My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?

Katietsu
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Re: COVID-19 Stimulus Payment Issue

Post by Katietsu » Wed Apr 01, 2020 10:16 pm

rickwmm wrote:
Wed Apr 01, 2020 10:10 pm
My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?
Boy. That is a twist I had not thought about. I wonder if the Treasury has worked out all these scenarios yet. I would guess not. I do think your daughter should be OK because they are supposed to start with 2019 first. But I do not know if anyone really knows the answer yet.

Katietsu
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Re: COVID-19 Stimulus Payment Issue

Post by Katietsu » Wed Apr 01, 2020 10:18 pm

freight_train wrote:
Wed Apr 01, 2020 9:35 pm
How about this: two spouses, one died 2 weeks ago. They filed MFJ for 2018 and just filed for 2019. I strongly suspect 2 $1200 payments are coming. Does the surviving spouse get to keep them both?
Last time there was a stimulus check, surviving spouse got to keep the double amount.

stocknoob4111
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Re: COVID-19 Stimulus Payment Issue

Post by stocknoob4111 » Thu Apr 02, 2020 2:39 am

there isn't any fairness in it... the incomes are not indexed for COL, a couple in Topeka,KS making $149,000/yr and still employed will get $2400 while someone solo in San Francisco making $101k and just lost their job gets nothing!

Starfish
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Re: COVID-19 Stimulus Payment Issue

Post by Starfish » Thu Apr 02, 2020 2:49 am

Just like taxes...

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celia
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Re: COVID-19 Stimulus Payment Issue

Post by celia » Thu Apr 02, 2020 3:25 am

freight_train wrote:
Wed Apr 01, 2020 9:35 pm
How about this: two spouses, one died 2 weeks ago. They filed MFJ for 2018 and just filed for 2019. I strongly suspect 2 $1200 payments are coming. Does the surviving spouse get to keep them both?
First, you only get one payment for 2018/2019. If they know one person has died, they will only pay $1200 for one tax payer. (Married taxpayers can get $2400 for either year, if they qualify.). In addition, if the 2019 income is over $75k, the widow(er) might not get anything.

They know one person died if it was reported on the tax return or if SS has been notified.


How about this scenario:
A single person qualified in 2018 but died in 2019 due to the virus and hadn’t yet filed the return. If no-one yet has notified SS (because they weren’t elderly), it appears they would get a check.

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celia
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Re: COVID-19 Stimulus Payment Issue

Post by celia » Thu Apr 02, 2020 4:14 am

As far as “fairness”, there is a good chance that most of it will work out fairly as the stimulus check is actually an advanced payment of a new refundable tax credit for 2020 that is slightly mentioned in this Kiplinger article:

https://www.kiplinger.com/article/spend ... -faqs.html

So, we will still have to file our 2020 taxes, (which we can assume will be “fair” across the board). If we find out we qualify for more than we received in the stimulus, we will get the balance refunded to us. If we qualify for less, it is unclear if we would have to pay it back.

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Geographer
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Re: COVID-19 Stimulus Payment Issue

Post by Geographer » Thu Apr 02, 2020 5:24 am

celia wrote:
Thu Apr 02, 2020 4:14 am
As far as “fairness”, there is a good chance that most of it will work out fairly as the stimulus check is actually an advanced payment of a new refundable tax credit for 2020 that is slightly mentioned in this Kiplinger article:

https://www.kiplinger.com/article/spend ... -faqs.html

So, we will still have to file our 2020 taxes, (which we can assume will be “fair” across the board). If we find out we qualify for more than we received in the stimulus, we will get the balance refunded to us. If we qualify for less, it is unclear if we would have to pay it back.
Ugh so this makes my situation confusing... I was MFJ for tax year 2019 and we qualify for a check. However, currently going through a divorce so I'll be filing single for 2020 and all my income will be tax-exempt from FEIE. Will I lose out on the credit and have to pay it back?

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burt
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Re: COVID-19 Stimulus Payment Issue

Post by burt » Thu Apr 02, 2020 6:03 am

brokendirtdart wrote:
Wed Apr 01, 2020 6:53 pm
rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
fairly
willardx wrote:
Wed Apr 01, 2020 5:28 pm
fair
There was never anything fair about this. It is purely a wealth redistribution move.
$6 Trillion stimulus divided by 100 million families = $60,000 per family.

rkhusky
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Re: COVID-19 Stimulus Payment Issue

Post by rkhusky » Thu Apr 02, 2020 6:12 am

You will not have to pay back an excess amount. Your credit for 2020 will be zero. There are no negative credits.

The stimulus payment is a shotgun, not a laser.

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Geographer
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Re: COVID-19 Stimulus Payment Issue

Post by Geographer » Thu Apr 02, 2020 6:34 am

rkhusky wrote:
Thu Apr 02, 2020 6:12 am
You will not have to pay back an excess amount. Your credit for 2020 will be zero. There are no negative credits.

The stimulus payment is a shotgun, not a laser.
Ahhh... so really it'll be a non-issue?

SimonJester
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Re: COVID-19 Stimulus Payment Issue

Post by SimonJester » Thu Apr 02, 2020 8:17 am

Geographer wrote:
Thu Apr 02, 2020 6:34 am
rkhusky wrote:
Thu Apr 02, 2020 6:12 am
You will not have to pay back an excess amount. Your credit for 2020 will be zero. There are no negative credits.

The stimulus payment is a shotgun, not a laser.
Ahhh... so really it'll be a non-issue?
Hopefully congress will not retroactively change that in December...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

trueblueky
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Re: COVID-19 Stimulus Payment Issue

Post by trueblueky » Thu Apr 02, 2020 8:30 am

rickwmm wrote:
Wed Apr 01, 2020 10:10 pm
My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.

I know they are exceptional because I prepare taxes as a volunteer. If we electronically file a return with a child's SSN and someone else has already filed with that number (sometimes happens in dual-custody situations; sometimes happens because of tax fraud), we will be notified of the return's rejection that same day.

My understanding is that IRS will first look to 2019 returns.

rkhusky
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Re: COVID-19 Stimulus Payment Issue

Post by rkhusky » Thu Apr 02, 2020 8:33 am

IRS has now said that SS recipients who are not required to file, will not have to file a return to get their checks.

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rickwmm
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Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Thu Apr 02, 2020 8:43 am

trueblueky wrote:
Thu Apr 02, 2020 8:30 am
rickwmm wrote:
Wed Apr 01, 2020 10:10 pm
My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.

I know they are exceptional because I prepare taxes as a volunteer. If we electronically file a return with a child's SSN and someone else has already filed with that number (sometimes happens in dual-custody situations; sometimes happens because of tax fraud), we will be notified of the return's rejection that same day.

My understanding is that IRS will first look to 2019 returns.
If that's the case, then I agree my daughter should be okay. But I do wonder - assuming they process her payment first - how they will process her ex-husband based on their 2018 joint return.

trueblueky
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Re: COVID-19 Stimulus Payment Issue

Post by trueblueky » Thu Apr 02, 2020 8:48 am

rickwmm wrote:
Thu Apr 02, 2020 8:43 am
trueblueky wrote:
Thu Apr 02, 2020 8:30 am
rickwmm wrote:
Wed Apr 01, 2020 10:10 pm
My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.

I know they are exceptional because I prepare taxes as a volunteer. If we electronically file a return with a child's SSN and someone else has already filed with that number (sometimes happens in dual-custody situations; sometimes happens because of tax fraud), we will be notified of the return's rejection that same day.

My understanding is that IRS will first look to 2019 returns.
If that's the case, then I agree my daughter should be okay. But I do wonder - assuming they process her payment first - how they will process her ex-husband based on their 2018 joint return.
I don't know. He should file his 2019 taxes to make it easy for the IRS.

newacct
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Re: COVID-19 Stimulus Payment Issue

Post by newacct » Thu Apr 02, 2020 11:16 am

trueblueky wrote:
Thu Apr 02, 2020 8:30 am
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.
It's not just an issue of "checking"; it's also a question of what the rules are. Where are you getting the idea that there is "no way the same SSN will be part of two checks"? I see nothing in the law that requires that.
trueblueky wrote:
Thu Apr 02, 2020 8:30 am
My understanding is that IRS will first look to 2019 returns.
The law says they will look at 2019 returns, but if 2019 returns haven't been filed by the time they make the determination, they will look at 2018 returns.

Topic Author
rickwmm
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Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Thu Apr 02, 2020 11:43 am

trueblueky wrote:
Thu Apr 02, 2020 8:48 am
rickwmm wrote:
Thu Apr 02, 2020 8:43 am
trueblueky wrote:
Thu Apr 02, 2020 8:30 am
rickwmm wrote:
Wed Apr 01, 2020 10:10 pm
My daughter also had a weird and complex scenario. She filed jointly with her husband in 2018 and claimed their son as dependent. In 2019 she got divorced and earlier this year she filed for 2019 as HOH, claiming her son as a dependent. But her ex-husband has most likely not filed yet. So her situation should be clear. Since she filed in 2019, she could cleanly get $1200 for herself and $500 for her son. But what about his situation? Since he hasn't filed for this year, it reverts back to 2018 which was a joint return. And to further complicate things, that return was filed using his checking account, to which she no longer has access. Will the government send him a $1200 payment, even though they can't separate out his income? Will they send him a joint payment of $2400 plus $500 for the child, with her unable to access her portion of the payment? This would mean she and her son would basically get two payments, with one set possibly going to the ex which she can't access. Or will her payment from her 2019 income not arrive because they processed a joint payment to her and her ex based on 2018 first?
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.

I know they are exceptional because I prepare taxes as a volunteer. If we electronically file a return with a child's SSN and someone else has already filed with that number (sometimes happens in dual-custody situations; sometimes happens because of tax fraud), we will be notified of the return's rejection that same day.

My understanding is that IRS will first look to 2019 returns.
If that's the case, then I agree my daughter should be okay. But I do wonder - assuming they process her payment first - how they will process her ex-husband based on their 2018 joint return.
I don't know. He should file his 2019 taxes to make it easy for the IRS.
I agree with that - except I believe he is one of those people whose income in 2019 was much higher than it was in 2018. So if his 2019 income was too high to qualify, then it would make sense for him to wait and see if he can get a payment based on his joint income with his ex-wife in 2018. I just don't see how logistically the government will handle that.

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celia
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Re: COVID-19 Stimulus Payment Issue

Post by celia » Thu Apr 02, 2020 11:47 am

Here’s how I would process the stimulus checks if I was the IRS:
Look at all the 2019 returns. Note who has died and send checks to the rest who qualify. All those SSNs are checked off.

Look at all the 2018 returns and do the same for SSNs who haven’t yet been issued a check. Those SSNs are then checked off.

Look at Medicare recipients. Note who has died and send checks to those who haven’t yet been sent one.

I have no idea how you would reach anyone else who hasn’t had contact with the federal government recently. Maybe the military and government employees could be recognized but I doubt they would be handled differently from non-government employees unless the bill made provision for that. Those who registered with the census wouldn’t count since that doesn’t tell citizenship and is supposed to remain confidential from the rest of the agencies. And since this is supposed to be related to a 2020 tax credit, if you don’t file taxes, you wouldn’t get the credit anyways.


Disclaimer: I am not the IRS. :D

Topic Author
rickwmm
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Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Thu Apr 02, 2020 12:06 pm

celia wrote:
Thu Apr 02, 2020 11:47 am
Here’s how I would process the stimulus checks if I was the IRS:
Look at all the 2019 returns. Note who has died and send checks to the rest who qualify. All those SSNs are checked off.

Look at all the 2018 returns and do the same for SSNs who haven’t yet been issued a check. Those SSNs are then checked off.

Look at Medicare recipients. Note who has died and send checks to those who haven’t yet been sent one.

I have no idea how you would reach anyone else who hasn’t had contact with the federal government recently. Maybe the military and government employees could be recognized but I doubt they would be handled differently from non-government employees unless the bill made provision for that. Those who registered with the census wouldn’t count since that doesn’t tell citizenship and is supposed to remain confidential from the rest of the agencies. And since this is supposed to be related to a 2020 tax credit, if you don’t file taxes, you wouldn’t get the credit anyways.


Disclaimer: I am not the IRS. :D
Well the big problem with your approach is that it doesn't address the inequity of people who qualify under 2018 income but not under 2019 income being treated differently depending on the timing of when they filed their 2019 return. As many have pointed out, it's not likely in this situation that the government will try to re-collect from anyone who benefitted by delaying their 2019 return. I think the only equitable way to resolve this is to issue checks to anyone who qualifies under either 2018 or 2019 income.

Silk McCue
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Re: COVID-19 Stimulus Payment Issue

Post by Silk McCue » Thu Apr 02, 2020 12:53 pm

rickwmm wrote:
Thu Apr 02, 2020 12:06 pm

Well the big problem with your approach is that it doesn't address the inequity of people who qualify under 2018 income but not under 2019 income being treated differently depending on the timing of when they filed their 2019 return. As many have pointed out, it's not likely in this situation that the government will try to re-collect from anyone who benefitted by delaying their 2019 return. I think the only equitable way to resolve this is to issue checks to anyone who qualifies under either 2018 or 2019 income.
This issue was resolved the minute the President signed the legislation that Congress presented to him. Your son doesn’t qualify based on 2019 taxes that he filed. I’m sorry but those are the breaks.

We don’t need to write checks to people that we know don’t qualify, like your son, just because they feel they missed out on something they don’t qualify for. Disappointment is a part of life. Time to deal with it.

At this point this thread seems to not be actionable.

Cheers

PVW
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Re: COVID-19 Stimulus Payment Issue

Post by PVW » Thu Apr 02, 2020 1:06 pm

rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
My son has a situation which I am sure must be fairly common. He qualifies for a payment based on his 2018 income but will not qualify based on his 2019 income. Fortunately, he hasn't filed yet for 2019, so I guess he will receive a check. But it creates what seems like a major inequity, as many people who filed early in 2019 will be deprived of a check but would have gotten one if they delayed filing.
I'm not too concerned about the equity and fairness of my portion of the recent stimulus package. In my opinion, if someone only qualifies because of a loophole, s/he should send the money back to the treasury or donate it to a cause that is supporting those that are affected by the pandemic.

Mako
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Re: COVID-19 Stimulus Payment Issue

Post by Mako » Thu Apr 02, 2020 1:17 pm

Silk McCue wrote:
Thu Apr 02, 2020 12:53 pm
This issue was resolved the minute the President signed the legislation that Congress presented to him. Your son doesn’t qualify based on 2019 taxes that he filed. I’m sorry but those are the breaks.

We don’t need to write checks to people that we know don’t qualify, like your son, just because they feel they missed out on something they don’t qualify for. Disappointment is a part of life. Time to deal with it.

At this point this thread seems to not be actionable.

Cheers
Exactly. This country often seems obsessed with other people getting stuff they "don't deserve." I'd wager that every single tax policy is "unfair" to somebody. There is no "issue" here, the rules are the rules, you win some you lose some.

M.Lee
Posts: 119
Joined: Tue Jun 25, 2019 8:26 am

Re: COVID-19 Stimulus Payment Issue

Post by M.Lee » Thu Apr 02, 2020 1:20 pm

Silk McCue wrote:
Thu Apr 02, 2020 12:53 pm
rickwmm wrote:
Thu Apr 02, 2020 12:06 pm

Well the big problem with your approach is that it doesn't address the inequity of people who qualify under 2018 income but not under 2019 income being treated differently depending on the timing of when they filed their 2019 return. As many have pointed out, it's not likely in this situation that the government will try to re-collect from anyone who benefitted by delaying their 2019 return. I think the only equitable way to resolve this is to issue checks to anyone who qualifies under either 2018 or 2019 income.
This issue was resolved the minute the President signed the legislation that Congress presented to him. Your son doesn’t qualify based on 2019 taxes that he filed. I’m sorry but those are the breaks.

We don’t need to write checks to people that we know don’t qualify, like your son, just because they feel they missed out on something they don’t qualify for. Disappointment is a part of life. Time to deal with it.

At this point this thread seems to not be actionable.

Cheers
Well, it's true that life isn't fair and all that, but it seems sensible to me that the same year should be used for everyone and I don't think it should be year 2019. I'm in the situation where I qualfied in 2018 and all prior years, but didn't in 2019 because of my first RMD. I don't really care because $1200 is no big deal to me. However, it is a big deal to some people.

PVW
Posts: 650
Joined: Mon Dec 29, 2014 11:01 am

Re: COVID-19 Stimulus Payment Issue

Post by PVW » Thu Apr 02, 2020 1:40 pm

M.Lee wrote:
Thu Apr 02, 2020 1:20 pm
Well, it's true that life isn't fair and all that, but it seems sensible to me that the same year should be used for everyone and I don't think it should be year 2019. I'm in the situation where I qualfied in 2018 and all prior years, but didn't in 2019 because of my first RMD. I don't really care because $1200 is no big deal to me. However, it is a big deal to some people.
The goal was to pump massive amounts of money into the economy through handouts to those in need. Recent history shows our legislators could have bickered for months over something like this. I think they did a decent job on this piece of legislation. There is no fair solution.

No doubt that when the panic passes, there will be ample finger pointing. Now is not the time.

Topic Author
rickwmm
Posts: 29
Joined: Sun Feb 10, 2013 3:29 pm

Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Thu Apr 02, 2020 1:42 pm

Silk McCue wrote:
Thu Apr 02, 2020 12:53 pm
rickwmm wrote:
Thu Apr 02, 2020 12:06 pm

Well the big problem with your approach is that it doesn't address the inequity of people who qualify under 2018 income but not under 2019 income being treated differently depending on the timing of when they filed their 2019 return. As many have pointed out, it's not likely in this situation that the government will try to re-collect from anyone who benefitted by delaying their 2019 return. I think the only equitable way to resolve this is to issue checks to anyone who qualifies under either 2018 or 2019 income.
This issue was resolved the minute the President signed the legislation that Congress presented to him. Your son doesn’t qualify based on 2019 taxes that he filed. I’m sorry but those are the breaks.

We don’t need to write checks to people that we know don’t qualify, like your son, just because they feel they missed out on something they don’t qualify for. Disappointment is a part of life. Time to deal with it.

At this point this thread seems to not be actionable.

Cheers
You misread my post. My son has not yet filed for 2019, so he DOES qualify based on his 2018 return. My reason for posting was to point out the inequity in the way this is being administered in that some people are receiving checks based merely on the accident of whether they filed yet for 2019. You may consider this issue to be resolved, but I see this as a major inequity and I suspect we will hear more about it over time.

RiotAct
Posts: 26
Joined: Tue Mar 31, 2020 8:21 pm

Re: COVID-19 Stimulus Payment Issue

Post by RiotAct » Thu Apr 02, 2020 1:44 pm

Silk McCue wrote:
Wed Apr 01, 2020 6:09 pm
Paradise wrote:
Wed Apr 01, 2020 5:34 pm
Not sure if it’s appropriate to hijack but also what about the opposite? We qualify for a check with 2019 income but not 2018 and also have an additional dependent. I immediately mail filed my taxes last week when I heard this was becoming a likely situation, but it seems like I’m not guaranteed they use my 2019 return depending on when they run the algorithm ? Any chance to appeal if they use 2018 by mistake?
File electronically now. I can’t fathom filing paper these days.

Cheers
Come on, there’s something therapeutic about slapping a couple stamps on a nice thick envelope and putting it in the nearest blue USPS mailbox.

trueblueky
Posts: 1784
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Re: COVID-19 Stimulus Payment Issue

Post by trueblueky » Thu Apr 02, 2020 2:29 pm

newacct wrote:
Thu Apr 02, 2020 11:16 am
trueblueky wrote:
Thu Apr 02, 2020 8:30 am
IRS is exceptional at checking Social Security numbers. I see no way the same SSN will be part of two checks.
It's not just an issue of "checking"; it's also a question of what the rules are. Where are you getting the idea that there is "no way the same SSN will be part of two checks"? I see nothing in the law that requires that.
I see nothing in the law that allows that.

trueblueky wrote:
Thu Apr 02, 2020 8:30 am
My understanding is that IRS will first look to 2019 returns.
The law says they will look at 2019 returns, but if 2019 returns haven't been filed by the time they make the determination, they will look at 2018 returns.

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Quirkz
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Re: COVID-19 Stimulus Payment Issue

Post by Quirkz » Thu Apr 02, 2020 2:47 pm

rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
My son has a situation which I am sure must be fairly common. He qualifies for a payment based on his 2018 income but will not qualify based on his 2019 income.
I think you got your answer, but my honest guess is this not a very common situation. One, the cutoffs are somewhere around the 80th percentile for income (actually maybe a little higher since this is AGI). Two, most people's income doesn't fluctuate all that much from year to year, with a few percent increase being most likely. Most folks are either under it or over it, and it would be exceptionally rare to have someone jumping from one zone to the other in a particular year.

But yeah, that's mostly me being contrarian. With 350 million people, a few will still hit that edge case, and I think the (not totally consistent, but at least existing) logic is mapped out pretty well by the other posts.

newacct
Posts: 33
Joined: Thu Feb 23, 2012 2:03 am

Re: COVID-19 Stimulus Payment Issue

Post by newacct » Thu Apr 02, 2020 2:50 pm

trueblueky wrote:
Thu Apr 02, 2020 2:29 pm
I see nothing in the law that allows that.
I do. Say Person A claimed Child C (under 16, has SSN) as a dependent in 2018, and Person B claimed Child C as a dependent in 2019. Person B has filed 2019 tax returns. Person A has not filed (and will not file for a while) 2019 tax returns.

Then according to the law, new IRC 6428 (section 2201 of the CARES Act) subsection (f)(1-2), Person B receives the advance refund if they are an eligible individual for the 2019 tax year, and the amount of the refund is equal to the amount they would have received as the credit if the conditions for the credit were applied to the 2019 tax year, which would include $500 for Child C since Child C is Person B's dependent for 2019.

If Person A has not filed a 2019 tax return by the time they make the determination, then under subsection (f)(5)(A), they substitute "2018" for "2019" in the provisions regarding the advance refund, so Person A receives the advance refund if they are an eligible individual for the 2018 tax year, and the amount of the refund is equal to the amount they would have received as the credit if the conditions for the credit were applied to the 2018 tax year, which would include $500 for Child C since Child C is Person A's dependent for 2018.

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Nate79
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Location: Delaware

Re: COVID-19 Stimulus Payment Issue

Post by Nate79 » Thu Apr 02, 2020 2:52 pm

There are always cases for those that fall outside the rules of any stimulus package like this or any law for that matter. That's the way the cookie crumbles. You either qualify or don't.

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LadyGeek
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Re: COVID-19 Stimulus Payment Issue

Post by LadyGeek » Thu Apr 02, 2020 3:25 pm

I removed an off-topic rant regarding the government's ability to use 2019 tax return information. Please stay on-topic.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

DaftInvestor
Posts: 5219
Joined: Wed Feb 19, 2014 10:11 am

Re: COVID-19 Stimulus Payment Issue

Post by DaftInvestor » Thu Apr 02, 2020 3:30 pm

The only way to have resolved this fairly would have been to not have done a stimulus check at all and instead, simply provide a bigger boost to unemployment benefits so those loosing their jobs would get all the needed benefits.

Topic Author
rickwmm
Posts: 29
Joined: Sun Feb 10, 2013 3:29 pm

Re: COVID-19 Stimulus Payment Issue

Post by rickwmm » Thu Apr 02, 2020 3:32 pm

Quirkz wrote:
Thu Apr 02, 2020 2:47 pm
rickwmm wrote:
Wed Apr 01, 2020 4:32 pm
My son has a situation which I am sure must be fairly common. He qualifies for a payment based on his 2018 income but will not qualify based on his 2019 income.
I think you got your answer, but my honest guess is this not a very common situation. One, the cutoffs are somewhere around the 80th percentile for income (actually maybe a little higher since this is AGI). Two, most people's income doesn't fluctuate all that much from year to year, with a few percent increase being most likely. Most folks are either under it or over it, and it would be exceptionally rare to have someone jumping from one zone to the other in a particular year.

But yeah, that's mostly me being contrarian. With 350 million people, a few will still hit that edge case, and I think the (not totally consistent, but at least existing) logic is mapped out pretty well by the other posts.
The big thing you are overlooking is people who changed jobs between 2018 and 2019, i.e., getting a much higher paying job in 2019. The other case is people whose compensation is partially variable where, for example, they may receive a variable bonus based on company performance, or where part of their compensation depends on overtime. I can see numerous scenarios where people qualify under one year's income and not the other. To avoid the eventual PR nightmare that will surely come out of this, I think the only fair way out of this may be for the government to award payments based on qualification under either year's income.

scottgekko
Posts: 81
Joined: Wed Feb 14, 2018 9:02 am

Re: COVID-19 Stimulus Payment Issue

Post by scottgekko » Thu Apr 02, 2020 3:40 pm

In the immortal words of Sturgill Simpson: Life ain't fair and the world is mean.

Paradise
Posts: 56
Joined: Mon Dec 18, 2017 6:15 am

Re: COVID-19 Stimulus Payment Issue

Post by Paradise » Thu Apr 02, 2020 3:47 pm

Silk McCue wrote:
Wed Apr 01, 2020 6:09 pm
Paradise wrote:
Wed Apr 01, 2020 5:34 pm
Not sure if it’s appropriate to hijack but also what about the opposite? We qualify for a check with 2019 income but not 2018 and also have an additional dependent. I immediately mail filed my taxes last week when I heard this was becoming a likely situation, but it seems like I’m not guaranteed they use my 2019 return depending on when they run the algorithm ? Any chance to appeal if they use 2018 by mistake?
File electronically now. I can’t fathom filing paper these days.

Cheers
I have never been able to electronically file due to some error in the system. Just curious what happens to me if they use 2018 returns. I can’t be the only person who has an extra child in 2019 or has less tax burden. Will they make up the difference once 2019 is processed? I don’t need the money right now but I’d hate to miss out on the cash.

emoore
Posts: 620
Joined: Mon Mar 04, 2013 8:16 pm

Re: COVID-19 Stimulus Payment Issue

Post by emoore » Thu Apr 02, 2020 3:53 pm

I understand that situation. I'm in a similar one. I filed my 2019 taxes with 2 children (under 17) so theoretically I should get $500 for each. But they are claimed by their other parents for 2018 and I'm not sure if the other parents have filed their 2019 taxes or not. Should be interesting to see what happens. I will update this post when the IRS deposits money.

Rainmaker41
Posts: 525
Joined: Tue Apr 26, 2016 11:34 am

Re: COVID-19 Stimulus Payment Issue

Post by Rainmaker41 » Thu Apr 02, 2020 4:04 pm

I would have voted for this. It's a humanitarian issue, not a stimulus issue, in my mind. We are donating our economic impact payment to a food bank anyway.
DaftInvestor wrote:
Thu Apr 02, 2020 3:30 pm
The only way to have resolved this fairly would have been to not have done a stimulus check at all and instead, simply provide a bigger boost to unemployment benefits so those loosing their jobs would get all the needed benefits.

trueblueky
Posts: 1784
Joined: Tue May 27, 2014 3:50 pm

Re: COVID-19 Stimulus Payment Issue

Post by trueblueky » Thu Apr 02, 2020 5:28 pm

Paradise wrote:
Thu Apr 02, 2020 3:47 pm
Silk McCue wrote:
Wed Apr 01, 2020 6:09 pm
Paradise wrote:
Wed Apr 01, 2020 5:34 pm
Not sure if it’s appropriate to hijack but also what about the opposite? We qualify for a check with 2019 income but not 2018 and also have an additional dependent. I immediately mail filed my taxes last week when I heard this was becoming a likely situation, but it seems like I’m not guaranteed they use my 2019 return depending on when they run the algorithm ? Any chance to appeal if they use 2018 by mistake?
File electronically now. I can’t fathom filing paper these days.

Cheers
I have never been able to electronically file due to some error in the system. Just curious what happens to me if they use 2018 returns. I can’t be the only person who has an extra child in 2019 or has less tax burden. Will they make up the difference once 2019 is processed? I don’t need the money right now but I’d hate to miss out on the cash.
They will make up the difference, if warranted, when you file your 2020 taxes next year.

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