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2020 COVID Stimulus Packages – Overview and Update

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. Another stimulus package is in the process of getting finalized by Congress. Here's all the info you need to know.

The COVID-19 pandemic has hit the world’s economy hard. In the United States alone, millions of people have seen a drastic cut in their paychecks since the virus first struck the country. As a result, Congress has already passed one economic stimulus package and may pass another one soon.

In this article, we’ll go over the CARES Act and what to do if you haven’t received your Economic Impact Payment (stimulus check). We’ll also discuss the likelihood of a second stimulus bill and how much you might expect to receive.

CARES Act

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The $2+ trillion package included direct payments to American workers via Economic Impact Payments. The Paycheck Protection Program supported small businesses that struggled to make payroll for their employees. Also, the bill extended unemployment insurance for workers and offered additional unemployment payments to affected individuals. Plus, the CARES Act financially supported hospitals and State, Local, and Tribal governments with expenses related to the impact of COVID-19.

Economic Impact Payments

The CARES Act authorized the federal government to distribute direct financial aid to American citizens in the form of Economic Impact Payments, also referred to as EIPs. These one-time payments are technically an advance on a refundable tax credit. Without getting into the tax legalese, it basically means that most Americans will receive a direct payment to help with daily household expenses during these trying economic times.

How Much Should You Receive?

According to the CARES Act, Americans are eligible for:

  • Up to $1,200 per adult for individuals who report less than $99,000 on their federal income returns
  • Up to $2,400 per married couple who file jointly and make less than $198,000
  • $500 per eligible child under 17 years of age

So, for example, if you have a family of four (two parents and two children), you could qualify for up to $3,400.

Who Is Eligible?

All U.S. citizens, permanent residents, and U.S. resident aliens are eligible for an Economic Impact Payment (EIP) of $1,200 or $2,400 depending on if they filed their taxes jointly and can be claimed as a dependent on someone else’s taxes. Plus, they must have a work-eligible Social Security Number and have an income under certain limits. Taxpayers may also qualify for an additional $500 per qualifying child.

You may be eligible for a payment if your adjusted gross income (AGI) is up to:

  • $150,000 for married couples who file joint tax returns
  • $75,000 for other eligible individuals

If your AGI is over these amounts, you’ll see a reduction in your payment equal to $5 for every $100 you are over the threshold.

Eligible Retirees and Benefits Recipients

U.S. citizens and resident aliens are also eligible for the EIP if they are eligible retirees, receive Social Security retirement benefits, survivor or disability benefits, or VA pensions. Also, persons not required to file tax returns will receive an automatic $1,200 payment.

Low-Income Taxpayers

If you have little or no income to report and, therefore, don’t file an annual tax return, don’t worry. You may still be eligible for a payment. However, you need to use the Non-Filer Tool at IRS.gov as soon as possible to make sure the IRS has your correct information and address on file.

No Permanent Address?

If you don’t have a permanent address or if you’re experiencing homelessness, you might still qualify for an EIP. But, you’ll need to sign up on the IRS website before October 1, 2020, to get your payment.

How Do You Get Your Payment?

Most eligible taxpayers will automatically receive the EIPs if they filed a federal income tax return in 2018 or 2019 or they receive the following benefits:

  • Social Security retirement, disability (SSDI), or survivor benefits
  • SSI (Supplemental Security Income)
  • C&P benefits (Veterans Affairs Compensation and Pension)
  • RRB benefits (Railroad Retirement Benefits)

If you have an active bank account on file with the IRS (for example, if you used direct deposit for a refund on your last tax return), then the IRS will use that account number to directly deposit your payment. However, if you don’t have a bank account or if the IRS doesn’t have that information for you, you will receive a check in the mail.

What If I Haven’t Received My Payment?

If you think you are eligible for an Economic Impact Payment but you haven’t received one yet, the IRS has a “Get My Payment” tool to help. From this site, you can check on the status of your payment, whether your payment has been sent, or if the IRS needs additional information from you to process your payment. You can even use the tool to let the IRS know if you want your payment mailed or direct deposited into your bank account.

Here’s some information about specific instances that might apply to you.

I Received a Letter from the IRS but Haven’t Received My EIP

If the IRS intends to send you a payment in the mail (versus a payment via direct deposit to a bank account), you will first receive a Notice 1444 informing you of that fact. The notice will include the date that the IRS plans to mail your payment. If you have not received your payment within 4 weeks of that date (6 week if your mail is being forwarded to a new address), you can start the “Trace Payment” process. Go to the IRS website, jump down to “How do I request a Payment Tract on my Economic Impact Payment,” and follow the instructions.

I Never Received My Direct Deposit

If you log into the IRS Get My Payment site, you will see a note if your payment has already been made via direct deposit. If you have not received your funds within 5 days of the scheduled deposit date, first check with your bank. If the bank doesn’t notice any issues with your account, the IRS has set up a process to trace your payment. Go to the IRS website, jump down to “How do I request a Payment Tract on my Economic Impact Payment,” and follow the instructions.

I Have a New Bank Account

If you have just opened a new bank account and you did not previously use direct deposit for your tax refunds (that is, the IRS doesn’t already have a bank account number for you), you might be able to update your information. Go to the IRS website, click Get My Payment, and follow the instructions.

However, if the IRS has a bank account number on file for you that is invalid or closed, the IRS will still try to make a deposit to that account. When it is rejected, the IRS will mail your EIP to your home. It can take up to 14 days to receive a payment in the mail, so be patient.

I’ve Moved

If you have moved to a new address since filing your last tax return, the IRS might have the wrong address on file. In that case, you can inform the IRS of your new address by mailing in Form 8822 – Change of Address, sending the IRS a written statement, or giving them your new information over the phone. If you’ve moved, follow the IRS instructions on this website.

Are There Exceptions?

Yes, there is one exception. If you have past-due child support, your payment may be offset. If this situation applies to you, you will receive a notice from the Bureau of Fiscal Service.

New Stimulus Package, July 2020

Although the details haven’t been finalized in Congress yet, it looks like another payment is in the near future for most Americans. Senate Republicans have announced their plans for a proposed second stimulus package they called CARES 2.

Of course, we won’t know the final details for several weeks. Members of Congress will probably go back and forth about the nitty gritty particulars and the CARES 2 bill may change before President Trump signs it. However, this is how the draft bill stands now:

  • The proposed stimulus check amount in the draft bill is the same as the first CARES Act or $1,200 per taxpayer.
  • As in the first CARES Act, CARES 2 currently recommends additional payments for qualified dependents potentially up to $1,200 each.
  • Depending on the number of dependents in a family, a cap of $6,000 per household may be established.
  • The requirements to receive a payment will likely be the same as the first payment.
  • Continued extended federal unemployment benefits.
  • A program that extends or is very similar to the PPP (Paycheck Protection Program).
  • Additional federal funding for school and universities 

Although preliminary discussions considered a monthly stipend to US taxpayers until the end of the pandemic, it looks like the second stimulus package, if passed, will include a one-time payment like the first CARES Act.

Check out this page for more tax policy articles.


Stephanie Ng is the Executive Committee member responsible for Finance at New Sight Eye Care, a charity registered in the United Kingdom and Hong Kong. She oversees the financial aspect of New Sight in Hong Kong, including accounting, taxation, financial management, and compliance.

She began her career as an investment banker at Lehman Brothers in New York and Morgan Stanley in Hong Kong. She later joined her client to work in the Group Finance Department, where she spent five years specializing in corporate finance, mergers and acquisitions, and debt refinancing. She also extended her role to management accounting and financial accounting and obtained her U.S. CPA qualification.

Stephanie also is a published author of the book How to Pass the CPA Exam. Additionally, she created https://www.ipassthecpaexam.com, the first CPA help site in 2010. Her guidance and mentorship have helped hundreds of thousands of candidates pass their exams.

Stephanie graduated with Phi Beta Kappa from the University of Chicago, majoring in economics with a second concentration in public policy studies.

You can find Stephanie on LinkedIn and on Twitter where she writes under the @ipassthecpaexam handle

Stephanie Ng is the Executive Committee member responsible for Finance at New Sight Eye Care, a charity registered in the United Kingdom and Hong Kong. She oversees the financial aspect of New Sight in Hong Kong, including accounting, taxation, financial management, and compliance. You can find Stephanie on LinkedIn and on Twitter where she writes under the @ipassthecpaexam handle.

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