Do you have to pay back your stimulus check? And is it taxable? We answer your most commonly asked questions
Since the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was signed on March 27, there have been many questions and uncertainties regarding the IRS stimulus payments. Whether you are up and running as an essential service, working remotely, or you’ve been forced to close, you may be wondering when your employees will get their stimulus support payments.
Here’s what we know so far:
When will my employees get their stimulus checks?
Stiimulus checks have started rolling out to select American taxpayers. IRS.gov has set up a webpage where you can see details of the rollout. Treasury Secretary Steven Mnuchin aims to start releasing stimulus payments by April 16, most likely starting with direct deposits. However, there’s no official timeline for release of payments from the IRS.
Checks will be processed based on income — with the lowest-paid recipients first in line.
The Washington Post’s recent review of an internal IRS plan suggests that people may receive their stimulus in the form of a direct deposit as early as April 9, while check-based payments will go out after April 24. Checks will be processed based on income — with the lowest-paid recipients first in line.
However, at an estimated 5 million checks per week, some Americans can’t expect relief until September. While that news can be disheartening, month-long time frames aren’t anything new. Looking back at the stimulus during the 2008 financial crisis, it took up to 8 weeks for employees to see their check or direct deposit.
How do I track a stimulus check?
Previously, there was no way to track the stimulus check and the IRS had not given any indication that it will create a tracking portal. Now, a page is up on the IRS.gov website where stimulus payments can be tracked: https://www.irs.gov/coronavirus/get-my-payment
If your employees have received their tax refunds through direct deposit in the past, you may not need to worry about checks at all. Otherwise, the IRS has stated that they hope to have an online portal ready for citizens to be able to apply for direct deposits by mid-April.
Do my employees have to pay back their stimulus checks?
While the stimulus money is technically listed as a tax credit, it does not need to be repaid by your employees …
While the stimulus money is technically listed as a tax credit, it does not need to be repaid by your employees, it is non-taxable, and it will not affect their tax refund for 2020.
How to avoid stimulus check scams
Currently, the IRS will not call, text, or email you or your employees about the stimulus check. The only documentation you will receive is a receipt, sent 15 days after you receive payment. And until the IRS creates a web portal for applicants to apply for direct deposits, there is no need to verify personal information.
More support for employees and businesses during COVID-19
The IRS will not just be providing stimulus to your employees in the form of checks. Small and mid-sized businesses will also be able to receive support in the form of the paycheck protection program, and 2 new tax credits.
With the sick and family leave tax credit, American businesses with under 500 employees can receive up to 100% reimbursement for their employee’s paid sick leave if COVID-19 was involved. This can mean that your employee or their relative was diagnosed with the virus. Employers will face no payroll liability. Employers will be able to get a refund on expenses that occurred from April 1, 2020, to December 31st, 2020.
The employee retention tax credit aims to help businesses that had to partially or fully shut down due to the coronavirus, equal to 50 percent of up to $10,000 in qualified wages, paid after March 12, 2020, and before January 1, 2021.