EVERYTHING You Need to Know About the $1200 Stimulus Check

Answers to your most pressing questions

The world has changed quite a bit in the past 4 weeks or so. The unemployment rate was 3.5%. Most Americans were able to travel as they pleased. The Dow closed at 26,703.32 points, and things like toilet paper and hand sanitizer were readily available in supermarkets.

Fast forward to today. Over 3 million workers filed for unemployment insurance, with fears that unemployment may reach 32%. The Dow closed at 21,917.16 points; a loss of 4786.16 points, or 18% from 4 weeks ago. People have hoarded hand sanitizer and toilet paper, making them virtually inaccessible for many Americans.

COVID-19 has changed the way we live and work. Millions of people all over the world have lost their jobs causing economic turmoil. The United States has taken several actions to shield its citizens from the economic impact of the coronavirus. I’ve spoken about previous steps they’ve taken in older articles.

Now the United States is trying something a bit different. In a move that might make Andrew Yang proud, the United States has decided to give its citizens a stimulus check to help them with any financial hardships they might be experiencing.

However, unlike Yang’s Freedom Dividend, this $1200 stimulus check comes with one or two strings attached.

Though it’s expected that 9 out of 10 households will receive a stimulus check, not all of them will be for the full $1200 amount. Many Americans might not receive a stimulus check at all. Those who will not receive a stimulus check at all include:

Any single US resident that has an adjusted gross income (AGI) of over $99,000

Any US resident who files jointly and makes over $198,000

There are also Americans who might not receive a stimulus check unless swift action is taken. The stimulus check amount will be determined based on your 2018 taxes or your 2019 taxes; whichever one you’ve filed most recently. If you have filed neither your 2018 nor your 2019 taxes, the IRS urges you to file now. If you have not filed your 2018 nor your 2019 taxes, you will not receive a stimulus check.

Also, there are Americans who may fall into certain categories where they are not normally required to file a tax return. These include the disabled, low-income taxpayers (generally, an individual who earns less than $12,200), retirees, senior citizens, Social Security recipients, and some veterans. In this instance, you would need to file a simple tax return to receive the stimulus check.

You don’t need to sign up for anything. If you’ve filed your 2018 or 2019 taxes, the IRS already has the information they require from you. If you received a paper check for your most recent tax refund, you can expect a paper check to come in the mail. If you received direct deposit, then you can expect the money to be deposited into your bank account.

Whether you receive a paper check or direct deposit, you will receive a letter from the government letting you know where they sent your payment. If you receive the notice, but never got a payment, reach out to the IRS using the contact information in the notice.

I’ve copied the following from the IRS’s Identity Protection Tips website:

“An unexpected email purporting to be from the IRS is always a scam. The IRS does not initiate contact with taxpayers by email or social media to request personal or financial information. If you receive a scam email claiming to be from the IRS, forward the email to phishing@irs.gov.

An unexpected phone call from someone claiming to be an IRS agent, either threatening you with arrest or deportation if you fail to pay immediately, is a scam. In another variation, the caller requests your financial information in order to send you a refund. Report these calls and other IRS impersonation schemes to the Treasury Inspector General for Tax Administration at 1–800–366–4484 or online at IRS Impersonation Scam Reporting.

If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov,' forward the link to phishing@irs.gov.”

Here’s the part you’ve probably been waiting for. How much of the $1200 stimulus check can you expect to get? This is where it gets a little complicated. If you’re a single US resident with an AGI of $75,000 or less, you can expect to receive the full $1200 stimulus check. That much everyone seems to be clear on.

Another point we should be clear on is that you will receive $500 for every dependent child you claim age 16 and younger. Older children and other dependents are not eligible for a payment.

What people are less clear on is how much money you get if you are a single US resident making more than $75,000 a year. Here is a simple way to figure that out. For every $1000 you make over $75,000 adjusted gross income, you will subtract $50 from your $1200 stimulus check. So for example, if you make $79,000 AGI, you can expect a $1000 stimulus check.

You would simply double these numbers if you’re a US resident filing jointly. If you filed jointly and earn $150,000 AGI, you can expect a $2400 stimulus payment. For every $1000 you make over $150,000 adjusted gross income, you will subtract $50 from your $2400 stimulus check.

There was no exact date given for when you’ll receive your $1200 stimulus check. Treasury Secretary Steven Mnuchin said on Sunday, March 29 that if you have direct deposit set up with the IRS, you can expect to see your payment in three weeks. Taken literally, that means payments should reach your bank account by April 19. It’s likely that your payment may take longer if you’re expecting to receive a paper check.

This is another point of complexity. Please remember that I am not a financial adviser, and none of this is financial advice. I’m just a guy on his computer giving you my opinion on what I would do in various situations.

These are uncertain times, and your first priority is to be safe and healthy. Regardless of how much money you receive in your stimulus, be sure to obey the rules set in place by your state and local governments. If you’re ordered to shelter in place, please do so.

Once your health and your safety are established, you’ll want to make sure you have adequate food for you and your family. This isn’t the time to consider buying a new TV or cellphone. We don’t know how long COVID-19 will be looming over our lives. If money is scarce, I would advise buying all the nonperishable food you can with the stimulus check.

When you’ve secured your health, shelter, and food, you may want to consider using the stimulus check to pay for any necessary bills you’ve fallen behind on. Many companies have information up on their websites explaining that they aren’t collecting past due bills, or turning services off for nonpayment. For example, nearly 70 internet service providers and telecommunication companies have pledged to the Federal Communications Commission that they will not cut off service during the coronavirus situation.

If you find your income has been affected by the coronavirus, I would encourage you to call your debtholders and see what their collection policy is at this time. You may be pleasantly surprised to discover that they will stop your payments upon simply asking and this will not affect you negatively in the future.

One of the bills you won’t need to worry about is your student loans. The same stimulus bill that is allowing the government to issue these $1200 stimulus checks offers a new set of rules putting federal student loans into forbearance through September 30, 2020. According to the bill, your loans will not accrue interest, and this will not negatively impact your credit score.

If you have gone through all of these steps and you still have extra money to spare from your $1200 stimulus check, you should consider depositing anything you have left in your emergency fund. Emergency funds are built for times of scarcity. If you don’t have an emergency fund, now is the time to start one. Your first step will be to build a beginner emergency fund with $1000.

If you find yourself in a position where money is tight, I’ve created a list of different ways you can earn an extra $1000 a month.

The United States is giving its citizens a $1200 stimulus check to help us get through the economic effects of coronavirus. This check is largely dependent on your income. You’ll receive the full amount if you’re a single taxpayer making $75,000 adjusted gross income or less. Couples filing jointly simply need to double their adjusted gross income to find out if they qualify.

The money is being sent to help Americans in this time of uncertainty. You should make sure you’re safe and healthy first. Ensure you and your family have an adequate supply of food. See if your debt holders are willing to waive interest and collection. Build an emergency fund with any money you have leftover from the $1200 stimulus check.