Coronavirus Aid, Relief, and Economic Security Act (“CARES” Act)
adopted by Congress on March 27, 2020.
By Beth Sufian, JD
Nothing In this article is meant to be legal advice and is only meant as information.
A. CARES Act.
1. What is the stimulus bill that is in the news?
On Friday, March 27, 2020, Congress adopted, and the President subsequently signed, the Coronavirus Aid, Relief, and Economic Security Act, also known as the “Stimulus Bill” or the “CARES” Act.
2. Why is this law important to people with cystic fibrosis?
This law provides two important economic benefits to individuals, including individuals with CF. First, the CARES Act provides stimulus payments to individuals. Second, the Act provides for enhanced unemployment insurance benefits for people who are out of work because of COVID-19.
B. ECONOMIC STIMULUS PAYMENTS.
1. Who is eligible to Receive a Stimulus Payment?
About 125 million people will receive CARES Act stimulus payments, which is 83% of all federal tax filers. Not every person will receive a stimulus payment. Individuals earning more than the eligibility limit, non‑resident aliens, and individuals claimed as a dependent on someone else’s tax return are all excluded from eligibility for a stimulus payment.
2. What are the eligibility limits?
Eligibility is determined by the individual’s tax filing status and amount of adjusted gross income. Adjusted gross income is defined as an individual's total gross income minus specific deductions.
a. What is the eligibility limit for single adults? How much will they receive?
Individuals who file a federal tax return as a single adult with annual adjusted gross income up to $75,000 should receive a $1,200 stimulus payment, plus $500 per dependent child under the age of 17 years. A single adult with annual adjusted gross income between $75,000 and $99,000 may qualify for payment, but the payment is reduced $5 for every $100 in income above $75,000. Single adult tax filers with adjusted gross income over $99,000 are not eligible for a payment.
b. What is the eligibility limit for married couples? How much will they receive?
Married couples with an annual adjusted gross income up to $150,000 are eligible for a stimulus payment of $2,400, plus $500 per dependent child under age 17 years. Married couples with an annual adjusted gross income between $150,000 and $198,000 may qualify for payment, but the payment is reduced $5 for every $100 in income above $150,000. Married couples with an adjusted gross income over $150,000 are not eligible for a payment.
c. What is the eligibility limit for a head of household? How much will they receive?
Individuals who file a tax return as a “head of household” (which is typically a single parent with dependent children) with an adjusted gross income up to $112,500 are eligible for a stimulus payment of $1,200, plus $500 per child under age 17. Heads of household with an adjusted gross income between $112,000 and $136,000 may qualify for a payment, but the payment is reduced by $5 for each $100 of income over $112,000.
3. How will the government determine who is eligible?
The stimulus payments will be made based on the 2019 tax return, which was initially due on April 15, 2020 and is now due on June 15, 2020. If a 2019 tax return is not available, the treasury department will base the stimulus payment on the individual’s 2018 tax return.
4. Is a person receiving Social Security Disability benefits or Supplemental Security Income (“SSI”) eligible for a stimulus payment?
An individual receiving Social Security retiree, Social Security Disability benefits, or SSI benefits is eligible to receive the CARES Act stimulus payment even if they did not file a tax return for 2018 or 2019, or if they filed a return and did not owe taxes in 2018 or 2019. It is not necessary to file an abbreviated or special form to receive the stimulus check. The CARES Act specifically gives the treasury the authority to make payments automatically to social security beneficiaries who do not file tax returns.
5. If I receive SSI and other benefits based on low income, will a stimulus payment make me ineligible for these benefits?
Stimulus payments appear to be characterized as a tax credit, and as a tax credit these payments do not count as income or resources for means-tested programs. Consequently, a stimulus payment under the CARES Act should not interfere with eligibility for SSI, SNAP, Medicaid, ACA premium credits, TANF, housing assistance, or other income-related federal programs.
6. Will I owe income tax on the stimulus payment?
No, the stimulus payments are not subject to federal income taxation.
7. If I now owe the IRS income tax, penalties, or interest, will that reduce my stimulus payment?
The IRS has stated that it will not apply administrative offsets to stimulus payments for amounts owed to IRS; however, the IRS will apply an administrative offset from any unpaid child support due that has been reported to the IRS for collection.
Beth Sufian has practiced law for 30 years. Beth is 54 and has cystic fibrosis. Beth is the current President of CF Roundtable. You may contact her with your legal questions about CF-related issues at CFLegal@sufianpassamano.com.