CARES Act Overview for Individual Taxpayers

CARES Act Overview for Individual Taxpayers

Firstrust is committed to providing our customers with all resources available during our current economic crisis.  In the recent weeks, many federal plans have been rolled out to assist consumers to help alleviate some of the hardships that have been encountered during the health crisis.  Below outlines some of the current programs we feel may help you in this time of need.

CARES ACT – Recovery Rebate for individual taxpayers

On Friday, March 28th the CARES Act was signed into law.  Below are some of the highlights that of the ACT for our consumers and ways you may benefit.  

  • The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers).  Additionally, taxpayers with children will receive a flat $500 for each child.  
  • The rebates would not be counted as taxable income for recipients as the rebate is a credit against tax liability and is refundable for taxpayers with no tax liability offset.  
  • The rebate phases out at $75,000 for singles, $112,500 for heads of household, and$150,000 for joint taxpayers at 5 percent per dollar of qualified income, or$50 per $1000 earned.  
  • It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children.  
  • 2019 or 2018 tax returns will be used to calculate the rebate advanced to taxpayers, but taxpayers eligible for a larger rebate based on 2020 income will receive it in the 2020 tax season.  
  • Taxpayers with high incomes in 2020 will see the over payment associated with their rebate forgiven. For example, a single taxpayer with $100,000 in 2019 income would not receive an advance rebate but would receive the $1,200 credit on their 2020 return if their income for the year fell below the phase out.  On the other hand, a single taxpayer with$35,000 in income receives a $1,200 advance rebate but would not have to pay the rebate back on the 2020 return if they make $100,000 this year.