IM-47 April 27, 2021; IM-04 January 26, 2021; IM-35 April 29, 2020
The legal basis for excluding COVID-19 Economic Impact Payments (EIP) is set forth in 26 U.S. Code 6409.
CARES ACT which was signed into law on March 27, 2020. Individuals will receive the EIP of $1,200 for individual or head of household filers, and $2,400 for married filing jointly, and $500 for minor dependents if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income (AGI) up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
- $75,000 and $99,000 if their filing status was single or married filing separately
- $112,500 and $136,500 for head of household
- $150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific AGI.
Consolidated Appropriations Act, 2021 which was signed into law on December 21, 2020. Individuals will receive the EIP of $600 for individual or head of household filers, $1,200 for married filing jointly and $600 for each minor dependent if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income (AGI) up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,000 for married couples filing joint returns
Payments will be reduced by 5% of the amount by which their AGI exceeds the applicable threshold above.
Eligible retirees and recipients of Social Security, Railroad Retirement, Disability or Veteran’s benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.
Retirees who receive either Social Security Retirement or Railroad Retirement benefits will also receive payments automatically.
American Rescue Plan Act, 2021 which was signed into law on March 11, 2021. Individuals will receive the EIP of $1,400 for individual or head of household filers, $2,800 for married filing jointly and $1,400 for each minor dependent if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income (AGI) up to:
- $75,000 for individuals
- $112,500 for head of household filers and
- $150,00 for married couples filing joint returns
Single filers with an AGI above $80,000, head of household filers with an AGI over $120,000, and joint filers with an AGI exceeding $160,000 will not receive stimulus payment.
Eligible retirees and recipients of Social Security, Railroad Retirement, Disability or Veteran’s benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.
Retirees who receive either Social Security Retirement or Railroad Retirement benefits will also receive payments automatically.
Funds received from COVID-19 Economic Impact Payments (EIP) are excluded income for the first 12 months from receipt. Do not consider these funds when determining the amount of cash and securities owned in that month.
If the participant has multiple accounts, verify into which account the EIP is being deposited. Deduct the payment from this account. If the payment is deposited into multiple accounts, determine how much is deposited into each account, and deduct that amount from the appropriate account.
Payments made on a direct benefit/prepaid card are considered as if deposited into a checking account.
Any cash remaining following the month payment was received from these sources is not considered as an available resource.
- NOTE: Interest earned on any unspent payments is excluded from income. However, any interest earned on such payments that is retained into the month following the month of receipt, is a countable resource.