The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or "Act") provides a $1,200 refundable tax credit for individuals ($2,400 for taxpayers filing jointly) as national relief measure. Taxpayers with children will receive an additional $500 for each child. The rebate starts to phase out at adjusted gross income of $75,000 for singles, $112,500 for heads of household, and $150,000 for taxpayers filing joint returns at the rate of $50 per $1,000 of income in excess of the phase-out amount. It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for taxpayers filing joint returns with no children.
The rebate is applied automatically. The IRS will calculate the amount of the rebate based on a taxpayer’s 2019 federal income tax return, or the 2018 tax return if the taxpayer has not filed the 2019 tax return and send the payment to the taxpayer. Taxpayers do not have to pay income tax on the rebates.
Category: COVID-19 Relief Law
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