The first wave of financial relief checks landed in the bank accounts of approximately 80 million Americans last week, as provided for in the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act Congress passed last month.
If you haven’t received yours yet, BILLSHARK wants to tell you how to speed up the process. If you have, we’d like to offer some suggestions on what—and what not—to do with your windfall.
Are you eligible?
Between 125 million and 150 million Americans are expected to receive a payment from this initial relief bill. Congress is talking about more COVID-19-related relief spending in the future, but right now it’s still uncertain when Congress will return to work. As of this date, the House isn’t scheduled to return until at least May 4th, and the Senate has also delayed its return due to coronavirus concerns.
The relief money was meant to help those who may be suffering financial hardship as a result of the coronavirus pandemic, so it was targeted toward lower-income people.
- Single people earning up to $75,000 will receive a payment of $1,200.
- Married couples earning up to $150,000 a year will receive a payment of $2,400.
- In addition, parents will receive a payment of $500 for each child under the age of 17.
For additional information on eligibility, see our previous blog, “Will You Get a Coronavirus Relief Check?”
How to get it faster
The money is being issued by the IRS to the lower-earning groups first, with the rest to follow in the days and weeks ahead.
WARNING: Even though the IRS won’t take this money if you owe back taxes or federal student loans (only if you owe child support), a loophole in the law allows private debt collectors—for credit cards, medical, or private student loan debt—to seize this money.
If this applies to you, monitor your bank account and take it out as soon as possible after it appears!
Last week the IRS launched the “Get My Payment” website to allow people to check on the status of their payment and input their direct deposit information if the IRS doesn’t already have that information. Be warned, though: Because so many millions of people are trying to log in, the site has already experienced numerous crashes.
Contrary to what the IRS said in the beginning, it is now not necessary to file a tax return to get your money if you are not required to do so. That is, if your income is so low ($12,200 for single people, $24,400 for married couples) that you don’t normally have to file a tax return, you won’t have to file one just to receive this payment.
But if the IRS doesn’t have your social security number and other relevant information because of this, you will need to go to their special web portal to input this information. This will also allow you to receive your money through direct deposit to your bank, rather than wait for a paper check to show up in the mail, which could take weeks or even months, although they are slated to start going out by the end of this month.
If you are required to file a 2019 tax return and didn’t file in either 2018 or 2019, you must file your 2019 taxes in order to receive a relief check.
How to spend it
If you’ve lost your job, either through layoff or furlough, or are temporarily quarantined because of the virus, you need to spend this money carefully. As we mentioned, there may or may not be more money forthcoming, but the smart bet is not to count on it.
You know your own financial situation, of course, but in general, if you’re one of the 60 percent of Americans with less than $1,000 saved for emergencies, you’ve no doubt exhausted that by now.
Therefore, we recommend you spend the money on necessities such as food, gas, and utilities. Other priorities include childcare payments and rent.
One thing we recommend against is using the money to pay down credit cards. Make the minimum payment only.
A side note: If you’re having trouble even making minimum payments, talk to your card holder and ask if you can have a forbearance (a temporary halt) to your payments. The same goes for phone and Internet providers: Despite their pledges not to disconnect for non-payment during the crisis, many users are losing their service regardless. Call your provider and ask for relief.
If you still have an income and aren’t strapped for cash at the moment, we nevertheless recommend you hang on to the money. The International Monetary Fund (IMF) projected last week that in 2020 the world economy will suffer its worst year since the Great Depression of the 1930s. Other economists see the jobless rate surging to 20 percent as soon as this month.
On the other hand, if you’re flush with cash and certain you’ll have plenty in the future, how about supporting some of your local businesses with this windfall? You could, for example, buy gift cards to places in your area that have been impacted by the stay-at-home shutdowns.
Or think about your local food banks, homeless shelters, or animal shelters, all of which are hurting as never before.
And if you need even more extra cash, why not let BILLSHARK take a look at your bills for free? We’ve been able to find hundreds of dollars in savings for our clients by negotiating with cable, satellite, phone, and Internet providers to lower their rates. Remember, you pay nothing unless we save you money.