AUSTIN (KXAN) — A viewer reached out to KXAN about the pending stimulus checks, which 80 million Americans are expected to receive this week.
Her concern was the check being based on her 2018 tax return, as opposed to 2019, which she hadn’t filed as of yet. Her 2019 return would reflect an additional child, or dependent, hence an extra $500.
Under the plan, independents making less than $75,000 will receive $1,200, married couples making less than $150,000 will receive $2,400 and filers with children will receive $500 for each qualifying child. The IRS uses the 2018 tax return to determine the payment, if 2019 hasn’t been filed yet.
“Problem is, our youngest was born in October of 2018, so she was not considered a dependent at that time,” she wrote in to KXAN. “We’re okay financially, so it’s not a huge deal, but that $500 could be groceries for another family.”
The payment is reduced by $5 for every $100 made above the $75,000/$150,000 threshold.
And, most people don’t have to do anything to receive the money if they filed their tax return using direct deposit. Physical checks will take longer, however.
We reached out to tax experts and the IRS — who we haven’t heard back from as yet — about any discrepancy with the stimulus payments.
Terri Holbrook is a tax expert and lecturer in the Accounting Department in the McCombs School of Business at the University of Texas at Austin.
She said the stimulus program is structured as a 2020 tax credit, so people will see their full stimulus amount, even if they don’t get it all right away because of an outdated tax return.
According to Holbrook, “the ultimate stimulus credit is really a credit based upon the 2020 filing.”
That means, when you file your 2020 tax return next year, you’ll get any additional payments then.
“For 2020, if she has one child, if she has three children, her ultimate credit will be based upon her 2020 filing,” Holbrook said.