1) If you have a direct deposit on file with the IRS from your 2019 or 2018 taxes, you should receive your one-time tax rebate directly in your account in the next two weeks.
2) If you do not have direct deposit information on file, to receive your one-time tax rebate, you will need to input your information at an IRS portal, which will go live in the coming weeks.
3) If you do not have a bank account, you will likely receive a payment in the mail with your one-time tax rebate.
Here are answers to some of the most common questions about how the CARES Act will impact individuals:
What are the details of the tax rebate?
This comes in the form of a one-time tax rebate check of $1,200 per individual / $2,400 per couple and $500 per child for those with a valid Social Security number. There are no earned income or tax liability requirements to receive these rebate checks. The full rebate amount is available for those with incomes at or below $75,000 for individuals, $112,500 for head of household, and $150,000 for married couples. Individuals making more than these thresholds will receive a reduced rebate check.
This income threshold will be calculated by using your 2018 or 2019 taxes, whichever you have filed most recently.
Arkansans that haven’t filed taxes in 2018 or 2019 but who have a valid Social Security number are still eligible, but the check won’t come automatically. There will be a process to contact the IRS to receive your check.
What are the changes to retirement accounts?
The CARES Act loosens rules on retirement accounts. Older Americans that are subject to mandatory required minimum distributions (RMD) from their retirement accounts, and have not already done so, would be able to keep their capital invested instead of being forced to cash out to draw on that capital without penalty, which would be suspended for 2020.
Similarly, the bill also waives the ten percent penalty on coronavirus-related early distributions from 401(k)s and IRAs, which applies to distributions made at any time during 2020.
What if you’ve lost your job due to COVID-19?
Arkansas provides unemployment benefits for a maximum of 16 weeks. The CARES Act adds up to $600 dollars per week to your benefits for up to four months and extends the time you can receive benefits by 13 weeks. These benefits will expire on July 31, 2020.
Unemployment benefits also have been enhanced to cover more workers including self-employed and independent contractors, like gig workers and Uber drivers, who do not usually qualify for unemployment. Overall, the CARES Act provides $250 billion in funding for the expansion of unemployment benefits, the largest increase ever.
Have any benefits in the Supplemental Nutrition Assistance Program (SNAP) been expanded?
At the state level, Governor Hutchison has suspended work requirements for SNAP recipients at least through the end of April. The state is also expediting applications to help families access benefits faster.
At the federal level, the U.S. Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) has expanded SNAP eligibility to families with children who would have received free or reduced lunch if in school.
Additional measures include: allotting emergency supplements to states for the distribution of monthly SNAP benefits up to the maximum for eligible families; suspending the time limit on benefits for able-bodied adults without dependents; and waiving the physical presence requirement for applying for and receiving benefits under WIC (Special Supplemental Nutrition Program for Women, Infants, and Children).
Do you still have to pay your student loans?
The Trump Administration already ended interest accrual on federal student loans through September 30, 2020. The CARES Act paused monthly repayment requirements forfederal student loans for six months with no penalty. The interest accrual stoppage is automatic, but students must contact the Department of Education to pause their payments.
Federal student loan borrowers also will lose no time towards loan forgiveness programs, such as the Public Service Loan Forgiveness program.
In addition, a great new benefit of the CARES Act is that employers can now contribute $5,250 per year to help their employees pay off their federal student loans, which will not be taxed for the employee.
Is there any relief on paying your mortgage?
The CARES Act prohibits foreclosures on any federally backed mortgages for 60-days, allows borrowers affected by COVID-19 to shift any missed payments to the end of their mortgage, with no added penalties or interest, for 180 days, halts evictions for renters in properties with federally-backed mortgages for 120 days, and gives relief to multifamily property owners through forbearance on any federally backed mortgage.