COVID-19: How much will your refund check be? Not much if you’re low-income
Disclaimer: I am not a CPA. All tax data in this article should be treated skeptically. Consult your 2019 (or 2018) tax return to find your actual federal income tax liability.
The Senate will vote later today on the Republican COVID-19 stimulus plan. Despite conversations indicated checks would be mailed to everyone a la a Universal Basic Income, the GOP put together a plan that is actually a tax rebate. In other words, this is a tax cut, not a stimulus plan.
The size of the refund is commensurate with the tax liability of the individual. A single person must pay at least $1,200 in federal income tax to qualify for the maximum payment. For those who file single, take the standard deduction and nothing else, this requires an income of at least $23,801.
Below this income, the check tapers down with tax liability to the minimum of $600, provided the individual filed a tax return in either 2018 or 2019. Those who earned less than the standard deduction of $12,200 in both 2018 and 2019 were not required to file a tax return and will likely receive nothing.
For married couples who filed jointly, the trend is the same at twice the income and rebate levels.
In all cases, taxpayers will receive an additional $500 per “qualifying child” but an individual must have paid some federal income tax in order to be eligible for this bonus. Parents whose incomes fall below the standard deduction will receive nothing under the GOP plan regardless of their number of dependents.
If you think these income levels are rare, consider that Tax Policy Center estimates over 40% of Americans paid no federal income tax in 2018 and 2019. Further, this segment of the population — which is most likely to be living paycheck to paycheck — is most at risk during the government-mandated economic shutdown that this stimulus is meant to address in the first place.
