Confused About Your Stimulus Check? Here's What You Need to Know

Ever since COVID-19 took hold in the U.S., it's been wreaking havoc on the economy, so much so that fears of a full-fledged recession continue to circulate. It's also forced millions of Americans into unemployment while leaving countless small businesses at risk of never reopening.

But there's help on the horizon in the form of a $2 trillion economic stimulus package that was approved in late March. Not only does this plan include provisions for small businesses, but it also includes a $1,200 stimulus payment for all eligible U.S. adults.

Still, many Americans are confused about the stimulus plan, and in a recent FinanceBuzz survey, 55% said they have no idea how much money to expect from it. If you feel like you're in the dark about your stimulus payment, here are a few things you need to know.

Man counting hundred-dollar bills

Image source: Getty Images.

1. There are income limits that dictate eligibility

Stimulus payments are worth up to $1,200 per adult and $500 per qualifying child in your household. To see if you're eligible for a stimulus payment, consult this table:

If Your Tax-Filing Status Is:

The Income Threshold for a Full Stimulus Payment Is:

The Income Threshold for a Partial Stimulus Payment Is:

Single

$75,000

Under $99,000

Head of household

$112,500

Under $136,500

Married filing jointly

$150,000

Under $198,000

Data source: CNBC.

Here's what this means: If you're single with no children and earn up to $75,000, you'll get a full $1,200. If you're single with no children and earn more than $75,000, but less than $99,000, you'll get some amount of money, but it may not be the full $1,200. The stimulus payment is reduced by $5 for each $100 that your income exceeds the first threshold, so using this example, if your income is $80,000, your stimulus would be reduced by $250, leaving you with $950.

Also, as a point of clarification, when we say "income thresholds," we're talking about your adjusted gross income, or AGI, as reported on either your 2018 or 2019 tax return. If you haven't yet submitted your 2019 taxes, your 2018 AGI will be used to determine your stimulus eligibility.

2. You don't necessarily need to apply for your stimulus payment

If the IRS has your bank account information on file, you don't need to do anything to get your stimulus payment; it will land in the account you used to have your most recent tax refund deposited directly. If you didn't provide bank account details to the IRS, you'll be directed to a website where you can input that information once the government has one up and running.

3. You can collect a stimulus payment if you're on Social Security

Being on Social Security won't impede your ability to get a stimulus payment. That said, if your Social Security benefits, coupled with other streams of income, push your AGI above the aforementioned thresholds, then you may not be eligible. If you're a senior who didn't file a tax return for 2018 or 2019, your eligibility will be based on your annual Social Security benefits statement.

We still don't know how soon stimulus payments will hit Americans' bank accounts, but it's conceivable that they could arrive sometime in April. And that's a little something to look forward to during an otherwise trying time.

The $16,728 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.