Senate approves $2.2T coronavirus rescue package with tax breaks

March 26, 2020

By Michael Cohn, Accounting Today

The Senate voted 96-0 late Wednesday to approve a sweeping $2.2 trillion stimulus package to help the nation emerge from the coronavirus pandemic.

The CARES Act package includes “recovery rebates” of $1,200 for individual taxpayers and $2,400 for married couples, along with an additional $500 for each of their children. That money will go to individual taxpayers with up to $75,000 in adjusted gross income ($150,000 if they are married). Even those who have no income, as well as those whose income comes entirely from non-taxable means-tested benefit programs, such as Social Security benefits, will be able to receive the money. The Internal Revenue Service will distribute the funds, preferably by direct deposit for taxpayers whose bank accounts are on file with the IRS from a tax return. If not, the IRS will mail out the checks, but this is likely to take much longer.

“For the vast majority of Americans, no action on their part will be required in order to receive a rebate check as [the] IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return,” according to a summary from the Senate Finance Committee majority staff led by chairman Chuck Grassley, R-Iowa. “This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.”“For the vast majority of Americans, no action on their part will be required in order to receive a rebate check as [the] IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return,” according to a summary from the Senate Finance Committee majority staff led by chairman Chuck Grassley, R-Iowa. “This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.”“For the vast majority of Americans, no action on their part will be required in order to receive a rebate check as [the] IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return,” according to a summary from the Senate Finance Committee majority staff led by chairman Chuck Grassley, R-Iowa. “This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.”

Continue reading

View all News