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The IRS can send money electronically to taxpayers who file returns with direct deposit or bank account information. The government will send paper checks or debit cards to the households for which the treasury cannot determine a bank account.
The IRS will use information on 2020 tax returns to determine eligibility and check amount. The agency will use the 2019 record for households that have not yet filed their taxes this year – including people who used the “non-file portal” for previous payment rounds.
The legislation provides full payments of $ 1,400 to those with adjusted gross income up to $ 75,000 for individuals, $ 112,500 for household heads and $ 150,000 for married couples filing a joint tax return.
The payments are reduced for those with an income that is above the thresholds. Payment will be limited to individuals earning $ 80,000 in income, heads of households with $ 120,000 and married couples with $ 160,000.
For those who have lost their jobs, the timing for filing a tax return has been hampered by a newly introduced tax break on unemployment benefits.
The aid waives tax up to $ 10,200 unemployed benefits individuals received last year. It provides an incentive to delay 2020 tax returns. However, since a loss of income in 2020 could potentially qualify someone for a stimulus test, it can be urgent to quickly file a tax return to reflect the income to the IRS.