Stimulus Checks: How Much Will You Get?

posted Brian Heying 4/8/2020 in Investments

Stimulus Checks

By now you have probably heard that the stimulus package, also known as Coronavirus Act, Relief, and Economic Security Act, or CARES Act, has been signed into law. 

As a part of the fiscal stimulus package, the CARES Act provides Recovery Rebates, also known as Stimulus Checks, to individuals and families. Keep in mind, the final version of the CARES Act is 990 pages long, and it will take accountants and financial planners weeks and months to sort out all the provisions.

For now, here’s what you need to know about the Recovery Rebates.


How much should I expect?
How does the rebate work?
What happens if I've had a life change since 2018?
How will I get my check?


How much should I expect?
It depends on your financial situation. Individuals will receive up to $1,200, couples filing jointly can expect up to $2,400, with an additional $500 per child. However, those numbers are adjusted depending on the adjusted gross income that you reported in 2018 or 2019 (the most recent year for which a filed tax return is available). If your adjusted gross income was over $75,000 as an individual or $150,000 as a couple, the rebate check will be reduced. Some people will receive no rebate at all. One confusing thing about Recovery Rebates is that they are calculated based on the taxpayer’s 2018 or 2019 income tax return — but they are treated as a rebate against 2020 income return.  

How does the rebate work?
The government will use 2018 or 2019 numbers to cut the initial checks. When the 2020 numbers become available, they will re-do the math. As a result, some people may get a smaller rebate (or no rebate at all) now, and another rebate later when the 2020 return shows that they 'deserved' it. In good news, if your 2020 tax return shows that you should have received less than what you actually received, the government won’t ask you to give the excess money back. So, once you receive the rebate check, you get to keep it.  

What happens if I've had a life change since 2018?
Many people have had major life changes between 2018 and now. Some have lost their spouse or have gotten divorced. Young families may have had a child. And, of course, your reported adjusted gross income for 2018 may be higher than in 2019 or 2020. If that’s your situation, consider filing your 2019 return as soon as possible to communicate those changes to the IRS. There is a chance that they would then use your 2019 numbers to calculate the rebate. However, you need to know that these are estimated timelines and not a guarantee.  

How will I get my check?
If you are receiving Social Security benefits and qualify for a rebate, it will be direct-deposited into the same account. The same goes for those whose 2018 or 2019 tax return resulted in a refund that was distributed by direct deposit. All others will receive a check in the mail. The timeline for those highly-anticipated checks is uncertain. According to the Treasury Department, it could be as soon as 3 weeks from the bill being signed into law (i.e. mid-April).  

As the nation deals with this time of economic uncertainty, your team at Lincoln Savings Bank and LSB Wealth Management remain committed to serving you and your families. Please don't hesitate to contact us or call us at 800-588-7551 if we can assist you in any way. 

Securities offered through LPL Financial Member FINRA/SIPC 

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