Individual Tax Rebates and Direct Distributions in the CARES Act
Title II of the CARES Act provides in various forms of recovery rebates and expanded benefits, like unemployment benefits, directly to individuals (within certain income ranges).
Many of these provisions have been well publicized, and some are expected to hit bank accounts in the near future.
This summary is to inform our industry on the type of benefits and relief available to fellow industry members. We also hope this information is useful for companies like manufactured home community owners who might want to better inform their residents or answer resident inquires as to what exactly they can expect in the form of assistance.
Purpose:
To provide immediate direct payments to certain individuals. Said differently, the government is cutting checks to people to the tune of nearly $507 billion.
Highlights:
- All U.S. residents with adjusted gross income up to $75,000 ($150,000 married) will receive $1,200 ($2,400 married) rebate.
- In addition, they will receive an additional $500 per child (under 17 years old).
- The IRS will administer the funds just as they do annual tax refunds
- The IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return if 2019 has not been filed yet
- If no tax returns have been filed in 2019 or 2018 (maybe because not enough income to require a filing) the IRS will use a person’s social security number.
- Direct deposits Expect April 17, followed by checks in the mail
- Social Security beneficiaries who don’t typically file tax returns, will receive the money automatically to their accounts without the additional need to file anything with the IRS
Eligibility:
- All U.S. residents
- Adjusted gross income up to $75,000 ($150,000 married), with phase out amounts up to $99,000 ($198,000)
- Not eligible if the person is claimed as a dependent of another taxpayer
- Must have a social security number
- Including:
- residents who have no income,
- residents whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits.
- This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit.
Phase Out Between $75K-$99K:
- Phase out from $75,000 ($150,000 married) to $99,000 (198,000 married)
- The rebate amount is reduced by $5 for each $100 that a taxpayer’s adjusted gross income exceeds $75,000 ($150,000 married)
- Completely phased-out for single filers with incomes exceeding $99,000; $146,500 for head of household filers with one child; and $198,000 for joint filers with no children.
- Phase Out Calculation Examples:
- Single, no kids with $85,000 AGI:
- Maximum non-phased out award = $1,200
- $85,000 - $75000 = $10,000;
- $10,000 x 5% = $500 amount of phase out;
- $1200 - $500 = $700 actual payment;
- Or ($85,000 - $75,000) x 5% = $500 phase out
- Married, with two kids with $200,000 AGI:
- Maximum non-phased out award = $3,400 ($2,400 married + $500 (child 1) + $500 (child 2) = $3,400
- $200,000 - $150,000 = $50,000;
- $50,000 x 5% = $2,500 amount of phase out;
- $3,400 - $2,500 = $900 actual payment
- Single, no kids with $85,000 AGI: