What You Need to Know About the CARES Act Stimulus Check

Money Funds

As we’ve reported, the CARES Act may provide you with a one-time payment from the government, depending on your income. 

Adult taxpayers with an income of $75,000 or less (before taxes or deductions) will each receive $1,200, or couples with a gross income of $150,000 or less will receive $2,400. People with children under 17 will also receive $500 per child. Based on annual earnings, the amount of the stimulus check will start to phase out for some individuals. See the chart below for income thresholds.

If you’ve filed your 2019 taxes, your stimulus amount will be based on your 2019 adjusted gross income or AGI. If you haven’t yet filed, the IRS will look at your 2018 tax return. 

If your tax-filing status is:

You will receive the full stimulus amount with an income below:

You will receive a partial stimulus amount with an income below:







Married Filing Jointly



When and how will I receive the check?

If you’ve used direct deposit to file your 2018 or 2019 taxes, you may have already received your federal stimulus funds. Check your bank account! Don’t worry if it’s not there yet, the IRS is still working to get every deposit made. If you haven’t used direct deposit in the past two years or aren’t normally required to file taxes, the federal government has a web portal for you to provide your info to the IRS (IRS.gov). You’ll need to look for “Non-Filers: Enter Payment Info Here” on the IRS website.

Americans who aren’t required to file taxes can also use TurboTax’s new tool to register their direct deposit info with the IRS and expedite their stimulus payment. If you don’t want to go the direct deposit route or aren’t able to receive direct deposit, paper checks will begin being mailed out as soon as April 24, 2020. Paper checks will likely be processed for the next several months and could take longer to receive.

Will I have to pay taxes on the stimulus money?

The stimulus checks are an advance of a 2020 tax credit. You will have to claim the credit on your 2020 taxes if you earn enough money to file a tax return. The credit will cancel itself out when you file your 2020 tax returns, so you won’t benefit from it more than once. 

Consult your tax advisor if you have additional questions about how to claim the funds on your 2020 tax return. 

How can I put my stimulus check to good use?

With unemployment claims reaching record highs during the COVID-19 crisis, the stimulus payments will help many families with immediate expenses such as food and housing. For some, it may replenish a depleted emergency savings fund. How you spend your check is up to you and your financial situation. 

Here are a couple of ways you can consider using the money:

Pay off high-interest debt

For many Americans, it can be wise to use an influx of cash to pay down debt, especially high-interest debt like credit cards. While the new legislation places a freeze on federal student loan payments and interest accumulation, credit cards often carry much higher interest rates, and balances will continue to accumulate interest during this time. Using your stimulus check to lower these high-interest balances can be a smart step toward financial security.

Invest in the local economy

You may be in the position to invest in your local economy. Small businesses are the heart of our economy, making up 99 percent of US businesses and employing millions of Americans (U.S. Small Business Association). When consumers frequent their local small businesses, they are making an investment in their local community. 

Nonprofit organizations are continuing to make a difference and supporting those in need. Consider donating to a COVID emergency fund or a local nonprofit to help their efforts. Your local United Way is a great place to start.

Please visit our COVID-19 resources page with information for business owners and employees.

As always, Nextep is here to help you and your family through this challenging time. Join our team every Friday at 10 a.m. for the latest updates on legislation and details of what these laws mean for you. 


Forbes: Stimulus check calculator

Blog: Small Changes Add Up – Why Healthy Financial Habits are Essential

Blog: The CARES Act Provides Additional Relief Through 401k Plans

What are lenders doing for COVID-19?

IRS: What you need to know about your stimulus check

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