Coronavirus Aid, Relief, and Economic Security Act CARES Act.

[dtlee]

If 2018 AGI gives a more favorable relief payment (2019 or 2020 AGI over limit) and overpayments don't have to be repaid, is it now advantageous for some to delay 2019 filing until relief payments are made?

Seemingly this would be true. However, we have no idea how long it will take for these payments to start arriving. This is a new program with new software to write with staff staying home due to the epidemic. It could be fairly soon or take quite a long time. First they need to review returns already filed for 2019 to include/exclude individuals. Then they would go to 2018. I would think it would only be after the checks start arriving for 2018 (or perhaps only after they start working on nonfilers with Social Security and Railroad Retirement benefits) that it would be safe to file the 2019 return. In reality, no one knows the answer.

[BP.]

If 2018 AGI gives a more favorable relief payment (2019 or 2020 AGI over limit) and overpayments don't have to be repaid, is it now advantageous for some to delay 2019 filing until relief payments are made?

[Lion]

If you have a SSN, you will probably get a check (or parents will get their dependents included in the parents' check). Your NRTF client may have to file 2020 returns to reconcile their payments; hopefully the final law will include more about how this will work.

[Maude Lebowski]

I am concerned about all those NRTF returns that don't show anywhere like my 70+ year olds.

The IRS is going to issue payments to those folks based on their records at Social Security.

[TAX4US]

I am concerned about all those NRTF returns that don't show anywhere like my 70+ year olds.

[Lion]

Wait until it's a law!

[ATSMAN]

I believe in 2020 return the reconciliation will be based on 2019 figures because the payment was based on 2019 if available or 2018 if not available at the time payments were calculated.

So it is very possible that based on 2018 figures a person qualified and got paid now BUT when 2019 return is filed 7/15 their AGI was higher and they don't qualify. So now what to do? Do the they have to pay back 100% or a portion keeping the min $600 that was in the bills language before??

[Twin Turbo Z]

So we are not quite sure if these payments are advances on next year refunds, to be reconciled next year ? Simply, do you think these will have to be paid back. Or paid back only if the taxpayers income exceeds the threshold in 2020 ?

[Burke]

Is this payment scenario not unlike something that existed in the early Obama years?
If so, I foresee next spring another huge increase in client complaints when their "refunds" shrink and they can't quite figure out that they already received a large part of same in the late spring of 2020.
FE

And we still don't know if this reconciliation is going to be based on 2020 Income Tax Liability or Total Tax Liability (which includes self-employment taxes.)

[Burke]

So I am assuming these rebates are for filers whether there is a tax liability or not for 2019? If this is an ADVANCE refund, then what happens if it exceeds their liability for 2020? Payback?

[ATSMAN]

This is the language in the Senate bill that just passed:

Subtitle B - Individual Provisions Sec. 2201. Recovery Rebates for Individuals.

This provision would provide $1,200 for singles and heads of households ($2,400 for married couples filing joints returns). The provision also provides $500 per qualifying child dependent under age 17 (using the rules under the Child Tax Credit). A family of four would receive $3,400. Rebates phase out at a 5% rate above adjusted gross incomes of $75,000 (single)/ $122,500 (head of household)/ $150,000 (joint). There is no income floor or phase-in – all recipients will receive the same amounts, provided they are under the phaseout threshold.

Tax filers must provide Social Security Numbers (SSN) for each family member claiming a rebate (adoption taxpayer identification numbers accepted for adopted children). An exception on SSN is made for spouses of active military members. The rebates are fully available to residents of U.S. Territories, including Puerto Rico. The rebates will be paid out as advance refunds (in the form of checks or direct deposit) on the basis of taxpayers’ filed tax year 2019 returns (or tax year 2018, if a 2019 return has not yet been filed). Non filers generally need to file a tax return in order to claim a rebate, although IRS may coordinate with other federal agencies in some instances to get checks out.

[ATSMAN]

I guess we have a deal now at least on the Senate bill. Let's hope it is signed into law ASAP!

[Rapid Robert]

Perhaps you and I live in a different country but in my area there has been several layoffs at small businesses.!

I'm pretty sure my area is harder hit than yours, since the shelter in place started sooner. I have several members of my immediate family, including one with a one month old child, that are presently out of work.

My point was, I don't understand why you think your personal opinion about "dicker[ing] over emission standards etc" belongs in a discussion forum for tax professionals. It's funny how some posts that try to introduce accurate facts about tax law (not this thread) are flagged as inappropriate, but your attempt to inject partisan politics gets a free pass.

[ATSMAN]

How is getting money from the federal gubernmint into the hands of workers an emergency for tax professionals? Hello anybody home?, indeed.

Perhaps you and I live in a different country but in my area there has been several layoffs at small businesses. I have several clients impacted by this and in particular one family where both husband and wife are in layoff status and their health insurance ends 3/31 and COBRA premiums are $900 per month. They have two small children. One child has a medical condition. It is an emergency for them to get some much needed cash in their hands.

I am just sick of certain politicians who believe never let a crisis go to waste and make the most political gains from it! The pending bill should have been voted and passed by the weekend and on President's desk on Monday!

[Lion]

My clients consider it an emergency to get their refunds to buy food and prescriptions after getting laid off and are anxious for me to complete their 2019 returns.. But, I consider it important for me to get more sleep to keep myself from getting this virus or any other illness. So, I'm slowing down a bit. If someone needs a 2018 return now, instead of thinking about that a year ago, I will prepare it after I prepare 2019 returns.