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What Is the SECURE Act and How Could It Impact You?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Americans may look forward to retiring, but many aren’t prepared. MagnifyMoney’s latest study on retirement found that only 47% of respondents are happy with the amount of money they’ve saved for retirement, and 60% don’t know exactly how much they’ve put away.

A bill that’s currently making its way through Congress is designed to help Americans build their nest egg. It’s called the SECURE Act — which stands for Setting Every Community Up for Retirement Enhancement — and it includes several provisions that would provide new ways and motivations for saving for retirement.

What is the SECURE Act?

The SECURE Act was introduced to the House of Representatives on March 29, 2019 by Rep. Richard Neal of Massachusetts to amend the Internal Revenue Code of 1986 and encourage retirement savings.

While Americans’ savings habits are certainly concerning, the Bureau of Labor and Statistics’ latest Employee Benefits Survey found that 32% of workers don’t even have access to a retirement savings plan. If the SECURE Act is passed into law, it will address the challenge by:

  • Creating opportunities for part-time workers to contribute to 401(k) retirement plans
  • Extending the amount of time that individuals can contribute to traditional IRAs
  • Increasing the required minimum distribution (RMD) age for retirement funds
  • Giving tax credits to businesses that automatically enroll employees in retirement savings plans

The provisions are designed to increase the availability of workplace retirement savings plans.
Additionally, the act also attempts to address the fact that people are living and working longer, and the impact that can have on when someone retires and the amount they have in savings. Human lifespans are increasing by approximately three years each generation, and biologists predict that the trend is likely to continue. And since 1996, the rate of retirement-age Americans (those aged 65 to 74) who are in the workforce has steadily increased. The Bureau of Labor Statistics projects that it will climb to 30.2% in 2026, compared with 17.5% in 1996.

How the SECURE Act could impact your retirement

From creating more opportunities to save to providing incentives to businesses that set up and encourage retirement planning, the SECURE Act could impact your own retirement options and balances in several distinct ways.

1. Part-time workers would have more opportunities to save

Part-time employees who don’t work at least 1,000 hours a year currently can be excluded from an employer’s 401(k) plan. This will change if the SECURE Act is passed.

Under the proposed legislation, employers must allow part-time employees that have been at the company for at least three consecutive years and work at least 500 hours a year an opportunity to participate in its 401(k) plan.

2. Older Americans could contribute to traditional IRA accounts for longer

Under current law, Americans can no longer contribute to a traditional IRA after they turn 70 1/2, even though several continue to work beyond this age. The SECURE Act would remove this limitation by repealing the age limit. This would mean that Americans could continue to save money for retirement as long as they choose.

3. Americans could let their retirement savings grow a little longer

Current law requires individuals to start withdrawing money from their retirement accounts once they reach the age of 70 1/2. Under the SECURE Act, the RMD age would change to 72. If the account holder doesn’t need the money right away, it could be left untouched to grow and potentially provide a significant boost to their overall retirement savings.

“The expansion of the RMD to 72 can add about 12% to an IRA balance at age 72 and increase the residual value of an IRA by about 8% at age 85, using 6% and RMD withdrawal,” said Leon C. LaBrecque, chief growth officer of Sequoia Financial Group in Troy, Mich.

4. New savings products would be offered in employee 401(k) plans

Many 401(k) providers avoid offering in-plan annuities to employees, in part due to concerns about liabilities. The SECURE Act, however, would protect employers by taking away some of the associated legal risks, potentially opening a new savings option to employees.

Annuities provide guaranteed payments over a period of time in exchange for an upfront, lump-sum payment. In retirement, these payments can act as a fixed stream of income over your lifetime, helping to prevent a person from outliving their savings.

“In principle, this could be wonderful, if the bills permitted only true annuities — that is, investments that pay a guaranteed, fixed sum of money each year — and if the fees they charged savers were kept in check,” said Nancy Hite, founder of the Strategic Wealth Advisor in Boca Raton, Fla. “Unfortunately, neither is the case. Currently, 401(k) providers are shielded from liability. If annuities are used they should only be low-priced and not complicated, which might limit the option to fixed annuities.”

5. Small businesses could access lower-cost 401(k) plans to offer to employees

Traditional 401(k) plans can be costly to set up, ranging from $5,000 to $10,000 each year in administrative fees and not including initial set-up fees, which is likely why many small companies don’t offer them. This puts the burden of researching and enrolling in a plan solely on the employee, which can result in fewer people following through.

The SECURE Act would make it easier for small businesses to offer plans by allowing them to join multi-employer plans with the same trustee, fiduciary, administrator, plan year and investment options. Unrelated businesses could leverage the power of scale and reduce their administrative costs.

In addition, the SECURE Act would increase the tax credit given to small businesses for starting a new 401(k) program for its employees to $500, to help offset the fees.

6. Small businesses could automatically enroll employees to encourage savings

The SECURE Act provides another tax credit of $500 to employers that create a safe harbor retirement plan — a type of 401(k) plan that is not subject to IRS nondiscrimination tests —
and automatically enroll employees. While workers could choose to opt out, automatic enrollment boosts participation and encourages workers to save for retirement.

Small businesses that already have a retirement plan would also be eligible for the tax credit if they convert their existing plan to one with auto-enrollment.

7. Automatic enrollment caps would increase to encourage higher saving

In addition to giving employers an incentive to automatically enroll workers in retirement plans, the SECURE Act would raise the cap on automatic increases from 10% to 15% of employee wages for safe harbor plans, which require employers to make a matching contribution. Employees can adjust the enrollment and choose a different contribution rate.

8. Retirement statements would have income stream disclosures

Retirement plan statements currently provide an account balance, but that doesn’t give people the full picture. You need to know how long it will last. The MagnifyMoney retirement study found that 27% of people have never thought about how much money they’ll need.

The SECURE Act will provide some help and context by requiring that contribution plans deliver a lifetime income disclosure to participants at least once every 12 months. The disclosure would show how much income the current lump sum balance in the account could generate. This would provide a reality check on how much money an account holder has, and how it would stretch over their estimated lifetime. If the amount is low, it could spur people to save more to reach income goals.

9. Some types of access to 401(k) funds would be limited

Each year, 11 million Americans take a loan against their 401(k) plan. Currently, you can borrow up to 50% of your balance, up to $50,000. Some 401(k) administrators allow employees to access loans through credit card arrangements.

The SECURE Act would end this practice, preventing easy access to retirement funds for routine or small purchases that could deplete savings over time.

Where things stand with the SECURE Act

The SECURE Act was passed in the House on May 23, 2019 by an overwhelming majority of 417-3. It was moved to the Senate on June 3, 2019, where it sits awaiting a vote.

“Sen. McConnell has hotlined the bill for unanimous consent,” LaBrecque said. “Sen. Cruz has objected to the House’s removal of 529 withdrawal for home-schooling expenses. We anticipate this will be resolved without a floor debate. However, bipartisan passage seems very likely.”

Edward Jasterm, a Certified Financial Planner and director of financial planning for Heritage Financial Services in Westwood, Mass., is more cautious in his outlook. “Although the Act has bipartisan support, it is not certain it will become law,” he said. “The Senate is in recess through Sept. 6, and has critical spending legislation to address in the short-term. If the SECURE Act can be tacked onto another bill, it is possible it could be voted on and moved forward. Proponents of the bill are working on that strategy to try to keep it alive in the Senate.”

The Senate has its own version of the SECURE Act, called Retirement Enhancement and Savings Act (RESA). The bill failed to pass in the last Congress that closed without taking final action. It was reintroduced with some technical modifications, including an exception to the required minimum distribution rules upon death of an IRA owner, and the deletion of a section that provided for an acceleration of Pension Benefits Guaranty Corporation premiums.

The Senate Finance Committee will either reconcile the two acts into a final version or choose to move forward with the SECURE Act. If the Senate does pass it and the president signs it, the law could be effective as soon as next year, LaBrecque said.

The bottom line

While the fate of the SECURE Act is being decided, it’s a good idea to review your current retirement plan and projected distribution during retirement, and determine if you need to find a strategy to increase your contributions. Since the legislation could create new options for retirement savings, it’s also important to educate yourself on those new options to choose the plan that’s right for your situation.

“A lot of people are not understanding that the tax rates are going to revert back higher in 2025 for most of us,” LaBrecque said. “Then the RMD math makes our tax rates higher as we get older. And then mortality makes us single, which makes our tax rates higher yet. We’re going to want to think about how we save for retirement.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Banking

COVID-19 Relief Package: What Congress and Banks Are Offering

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

American taxpayers can finally expect some relief heading their way, thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law two months after the coronavirus (COVID-19) first appeared in the U.S. This $2 trillion financial relief package seeks to provide assistance to affected taxpayers as well as small businesses and corporations.

In addition to the government’s efforts, banks across the country have also stepped up. To help you navigate these challenging times and make sure you’re aware of all potential resources, we’ve compiled the latest information on the government’s relief packages and relief plans from the big banks.

We will continue to update this page as the situation evolves.

One-time stimulus checks

Taxpayers’ long-awaited direct payments, or recovery rebates, will be determined by their most recent tax return. For many, this will be your 2019 tax return, since we have yet to file taxes for 2020. If you have not yet filed your 2019 tax return, the government will turn to your 2018 return instead.

How much you’ll get: For individuals, the plan will provide one-time direct payments of $1,200 ($2,400 for joint returns) to those with an annual income of $75,000 or less. Payments will decrease incrementally for those who made more than $75,000 and will stop altogether for individuals who earned more than $99,000. Individuals will also receive an additional $500 per child.

To find the estimated amount of your recovery rebate check, drag your cursor along the line below to your corresponding income amount. We also have a stimulus check calculator you can use to determine your payment amount.

How to sign up: For most taxpayers, there’s no need to sign up for this. All you need is a valid Social Security number to receive these relief rebates. The IRS will distribute these payments based on information from your most recent tax return.

If you receive Social Security benefits or do not typically file a tax return, the IRS will use the information on your 1099 Social Security forms (Form SSA-1099 or Form RRB-1099) to determine your payments. Individuals who qualify with these forms will not receive additional payments for dependents, as the forms do not disclose dependent information. The IRS includes senior citizens, Social Security recipients and railroad retirees in this group. If that does not include you but you typically don’t file a tax return, you may want to file a simple tax return as soon as possible to receive the economic impact payments.

In conjunction with the IRS, the U.S. Treasury Department has plans to create an online portal where individuals can submit their most recent banking information to the IRS. Check back here or the IRS’s coronavirus information page for updates.

How you’ll get the check: Depending on what you requested on your tax return, the IRS will send the payment either via direct deposit or a paper check. If your address or bank account information has changed since 2018, file your 2019 tax return as soon as possible, if you haven’t already.

When the checks will come: As of now, taxpayers can expect to see payments sometime in April.

Are the checks taxed? These recovery rebates are considered advanced tax credits for 2020 and should not be taxed for most. Since the payment amounts are determined based on your previous tax returns, however, the payments could be subject to adjustment if you earned more or less this year compared to prior years.

For example, if you received too large of a rebate proportionate to your most recent income, you could end up owing back the excess. However, it is so far expected that taxpayers will not have to return or pay tax on any portion of these rebates, regardless of income changes. If you receive a payment that is too low, you also may be able to receive a tax credit from your 2020 taxes to make up the difference.

Expanded unemployment benefits

For starters, individuals who have found themselves unable to work as a result of COVID-19, including those who are sick, quarantined or taking care of family members, will be able to collect unemployment, extending those benefits beyond those who were fired or laid off.

The stimulus bill will also add $600 on top of existing unemployment benefits (currently averaging about $300 a week) for four months and extend unemployment insurance by 13 weeks. The bill will also ensure that workers maintain their full salaries if they lose their job due to the coronavirus pandemic.

This additional funding will come from the federal government rather than from states and employers, who typically fund unemployment benefits. Unemployment benefits are still taxable under current law, which the stimulus bill does not account for.

Eased penalties around retirement account withdrawals

The bill also allows those affected by COVID-19 to withdraw up to $100,000 from qualified retirement accounts, including your 401(k) and IRAs, without facing the 10% early withdrawal penalty that typically applies when you make withdrawals when you are under the age of 59 ½. You will still have to pay income taxes on your withdrawals, though these taxes will now be due over the course of three years instead of immediately. Additionally, the bill waives required minimum distributions (RMDs) for select retirement plans for this year.

Qualified individuals include those who are diagnosed with COVID-19 or have a spouse or dependent who has been diagnosed with COVID-19, as well as those who have been laid off, quarantined, furloughed or faced reduced hours due to the pandemic. This applies through Dec. 31, 2020.

Even though the bill allows it, withdrawing from your retirement accounts before you’ve actually hit retirement is generally not the best plan — especially if you’re already close to retiring. By doing so, you run the high risk of hurting the nest egg that you’ve worked hard to build for retirement. Still, this may be the only source of money available to many right now.

Small business relief

The stimulus plan includes $425 billion for the Federal Reserve to leverage for emergency loans to distressed companies and $75 billion for industry-specific loans. Despite previous claims from President Trump that he alone would choose which businesses received aid, this lending system will fall under oversight by an inspector general and a congressionally-appointed panel.

The spending package also provides $350 billion that will go toward lending programs for small businesses, but only those that keep their payrolls steady through the crisis. There is also a reward for small businesses that keep their workers in the form of federally-guaranteed loans that will be forgiven if the employer continues to pay its workers throughout this time of crisis.

Additionally, the plan allocates $130 billion for hospitals and $150 billion for state and local governments.

Banks’ responses to COVID-19

In the meantime, millions of Americans are struggling with changes to their work hours and incomes. Some banks are offering relief packages of their own, often waiving certain fees or offering expedited services. Certain banks, like Ally Bank, are providing more robust aid than others, while several big banks have not committed to providing widespread support. Although not listed below, community banks may offer a stronger support system to those financially affected.

Many banks also warn customers about keeping their information and money safe from fraudsters. Unfortunately, scams and phishing attempts are cropping up to take advantage of this crisis. Be wary of phone calls, emails and texts from suspicious senders who ask for personal or account information, and avoid clicking on links in emails and texts. When in doubt, head to your institution’s official website to verify the bank’s contact information or log into your account to access its secure messaging system.

Wondering whether your bank is offering a relief package? Here’s what some of the biggest banks are offering.

American Express

American Express has not released any specific COVID-19 relief plans to help its Personal Savings banking customers at this time.

Customers of the online-only bank can continue to access their accounts online. They can also call customer service at 1-800-446-6307 — just beware that wait times may be longer than usual.

Ally Bank

Online-only Ally Bank currently has an expansive COVID-19 relief plan, especially in comparison to other banks. The bank has outlined measures to help customers, employees and communities.

Until July 18, 2020, Ally Bank deposits customers can benefit from waived overdraft fees; free expedited checks and debit cards; and waived excessive transaction fees on your savings or money market accounts.

Transfers and online payments remain uninterrupted. Plus, Ally Bank has made it faster to deposit checks of $50,000 or less online with Ally eCheck deposit. You can still use mobile deposit via the Ally Mobile app.

Bank of America

Bank of America’s COVID-19 response so far is encouraging its customers to turn to mobile and online banking first, both of which allow you to check your account statuses, pay bills and deposit checks.

However, Bank of America financial centers remain open. The bank’s locations are open Monday through Friday, 10 a.m. to 4 p.m. local time, while Saturdays maintain regular hours, which vary from branch to branch. Branches that remain open undergo “enhanced, daily cleanings” and “other measures to limit the risk of exposure, based on guidelines from the Centers for Disease Control and Prevention (CDC).”

As for relief in light of the coronavirus outbreak, Bank of America urges any customers who are facing financial hardship to contact a representative who will “work with you to create a solution tailored to your particular situation” or use its virtual assistant, Erica, to get answers to any questions. For banking customers, relief solutions can include waiving certain fees, such as overdraft fees.

Capital One

In response to the coronavirus pandemic, Capital One is waiving its out-of-network ATM fee. It won’t reimburse you for a third-party surcharge, though.

If you are facing financial difficulties, you can contact Capital One and a representative can help to find a solution for you. Note that customer service wait times are likely longer than usual right now.

Capital One has temporarily closed select branches that do not have drive-thru tellers or protective glass at teller counters. Branches that do have those features will remain open via those outlets and are being disinfected per CDC guidelines. Tellers may still assist customers in the lobby in special circumstances. Capital One ATMs remain open 24/7. Capital One also strongly encourages its customers to use the Capital One mobile app or online banking to make payments, check balances and deposit checks.

Charles Schwab

Charles Schwab has no specific measures in place to provide relief aid to its banking customers amid the coronavirus outbreak.

Schwab branches are temporarily closed as of March 20 and will remain so until local, state and federal government recommendations indicate it is safe to reopen. Still, you can contact a branch directly by phone to reach a representative. Schwab also encourages customers to go digital by completing tasks online or via its mobile app, which includes check-depositing capabilities.

Chase

In light of the pandemic, Chase Bank customers are encouraged to use the Chase Mobile app and online banking to complete their account-related tasks. Chase asks that those who need help because of COVID-19 reach out to a representative, though you may experience wait times that are longer than usual.

Several Chase branches are temporarily closed, while other branches’ hours and services have been adjusted. You can check the status of your branch on the Chase Mobile app or online. Chase branches and ATMs are being cleaned with EPA-approved disinfectants.

On a wider scale, JPMorgan Chase has pledged $50 million to nonprofit organizations to help support “healthcare, food and other humanitarian relief” efforts globally; community partners; and small businesses in the U.S., China and Europe.

Citibank

Citibank is waiting monthly service fees and early withdrawal penalties through May 8, 2020. Fees are also temporarily waived on safe deposit boxes and non-Citi ATM usage.

Citibank also asks that those affected by COVID-19 contact the bank for assistance, although wait times may be longer than usual. If you already work with a personal banker or financial advisor through Citibank, you can contact them directly during their regular business hours.

Select Citibank branches are closed and those that are open are operating under temporarily limited hours and undergoing “daily cleaning procedures … on high-touch surfaces,” providing hand sanitizer and practicing CDC recommendations like social distancing. You can also access your accounts and funds via the Citi Mobile app, the Citibank website and Citi ATMs on a 24/7 basis.

Discover

Discover has “support in place for qualified Discover customers who experience hardship” due to the coronavirus pandemic. Although it is unclear what qualifies customers to receive this support, a Discover representative adds that “Discover customers may receive assistance related to payments, fees and interest.”

Discover Online Banking customers can call 1-800-347-7000 (TTY/TDD 1-800-347-7454) any time to reach a Discover representative for assistance. You also can continue to access your accounts online or via the Discover mobile app.

Goldman Sachs Bank USA

Customers of Marcus by Goldman Sachs can make penalty-free withdrawals from regular CDs at this time, as a direct response to COVID-19. You can do so by calling 1-855-730-7283. Marcus contact centers are operating virtually, with temporary hours of 9 a.m. to 8 p.m. ET Monday through Friday and 9 a.m. to 6 p.m. ET on Saturday and Sunday.

You can still access your Marcus accounts online. Apple device users can also benefit from the Marcus mobile app.

PNC Bank

PNC Bank customers who are experiencing financial hardship as a result of COVID-19 should call 1-888-762-2265, which is available 7 a.m. to 10 p.m. ET Monday through Friday and 8 a.m. to 5 p.m. ET on Saturday and Sunday. Virtual Wallet customers may call 1-800-352-2255, available during the same hours.

If you are eligible for assistance, a PNC representative will discuss your options with you, which include waiving or refunding fees on deposit accounts (and other products). Qualified customers can also take out an emergency hardship loan “at a low rate.” PNC did not make it clear how it determines eligibility for assistance, but it stressed that customers should call for help.

As of March 20, select PNC branches are closed. Others remain open with limited hours and access, with some are operating via drive-up window only. You can use PNC’s branch locator to check the status of a branch and to find a branch that offers essential appointments, made available for safe deposit box access, loan closings or other banking services that you cannot make otherwise. PNC is also still widely accessible via online, mobile and voice banking.

TD Bank

TD Bank encourages customers affected by COVID-19 to call 1-888-751-9000 to see how the bank can support you as it says it “may be able to provide some financial relief.” Of course, wait times are uncharacteristically long at this time.

Assistance options offered by TD Bank will depend on your situation and request but may include fee refunds, early, penalty-free access to CDs and payment extensions. The bank’s customer assistance offers continue to evolve as well, according to a bank representative.

As of April 2, most TD Bank branches are temporarily closed or operating via drive-thru only. At TD Bank drive-thrus, you can make deposits, withdrawals and payments; cash checks; get a bank check or money order; and make business deposits or coin orders. Branches with open lobbies are available by appointment only. TD Bank branch reduced hours are 9:30 a.m. to 4 p.m. Monday through Friday via drive-thru, 9:30 a.m. to 1 p.m. Saturdays unless normally closed and closed on Sundays (all times are local). You can check the status of branches by state on TD Bank’s COVID-19 updates page.

TD Bank ATMs are still accessible, as is its website and banking app.

Truist (formerly BB&T and SunTrust)

Truist, the result of a recent merger between BB&T and SunTrust, is offering its deposits customers temporarily-waived ATM surcharge fees.

For further assistance, Truist encourages heritage BB&T clients to call 1-800-226-5228 and heritage SunTrust clients to call 1-877-820-2103. Watch out for long wait times, however, which customers have reported on social media.

Local BB&T and SunTrust branch hours and services are temporarily moving to drive-thru teller services only, appointment-only in-person visits and select branch closures. Customers still have 24/7 access to ATMs as well as online, mobile and telephone banking.

Truist has also established a $25 million Truist Cares initiative, which will provide funding to the CDC Foundation and Johns Hopkins Medicine; local United Way organizations; and grants to Truist’s community partners.

U.S. Bank

U.S. Bank maintains that it is “actively looking for ways to help customers” who have been impacted. Deposits customers who have been financially affected by COVID-19 should call the bank at 1-888-287-7817.

U.S. Bank branch operations are temporarily reduced, and the bank encourages customers to use drive-up windows instead of going inside a branch. You can check your local branch’s hours and status online. Otherwise, you can still access your U.S. Bank accounts on the bank’s mobile app, by phone or on its website.

Wells Fargo

Wells Fargo has said it will offer fee waivers for customers who contact the company. On a larger scale, the Wells Fargo Foundation has pledged up to $6.25 million in donations “to support domestic and global response to the COVID-19 and to aid public health relief efforts.” This includes funding “at the local level,” as well as for the national CDC and the International Medical Corps.

Select Wells Fargo locations are temporarily closed, while the branches that remain open have temporarily reduced hours. You can check the status of a Wells Fargo branch here. If you need a service that can only be completed in a branch, you can make an appointment. Wells Fargo call centers still remain open, though they are experiencing higher-than-normal call volume and longer wait times.

You can also access your accounts online and on the Wells Fargo Mobile app, where you can deposit checks, move money and more. Wells Fargo also reminds customers that they can use contactless cards or digital wallets for payments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Banking

How Much Will My Stimulus Check Be? Calculate Your Payment

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

As the coronavirus (COVID-19) pandemic continues to batter the economy — prompting the stock market to plummet and unemployment claims to spike — the U.S. federal government is throwing taxpayers a life raft, in the form of stimulus checks.

Congress has passed a $2 trillion relief bill that aims to provide emergency assistance to individuals, families and businesses affected by the coronavirus pandemic, including one-time payments made to individuals. The amount of money you can expect to see from Uncle Sam, though, is based on a number of factors, ranging from how much money you make to how many children you have.

Who qualifies for a stimulus check?

Under the relief bill — dubbed the CARES Act — most adults who have a valid Social Security number will be able to qualify for a stimulus check, with the size of that check based on your 2019 or 2018 tax return.

You also qualify for a stimulus check if you receive Social Security benefits for disability, retirement or Supplemental Security Income, according to the AARP. Social Security recipients will not need to file 2019 taxes to receive their check as previously stated — instead, information will be based on 1099 forms.

In order to qualify, you need to meet the following requirements:

You must fall below income thresholds: The bulk of those who do not qualify for a stimulus check will likely be high-earners: Under the CARES Act, if you’re an individual with no children who earns over $99,000 or are a married couple that filed jointly and are making more than $198,000, you are not eligible to receive a stimulus check.

You cannot be claimed as a dependent of someone else: Additionally, in order to receive a stimulus check, you cannot be claimed as a dependent of someone else. That’s noteworthy, and may mean that millions of dependents who are not children under the age of 17 could end up missing out on relief checks. As the Center on Budget and Policy Priorities points out, filers only receive an additional $500 for each child under 17, which could be problematic for people who support dependents like the elderly, adults with disabilities and college students.

You must have a valid Social Security number: To receive a rebate check, each member of the household (including children) is also required to have a valid Social Security number. Per the Center on Budget Policy and Priorities, this may mean that households of certain immigrant families with children who are U.S. citizens could still be denied a stimulus check.

How much are the stimulus checks?

The amount of your stimulus check is based off of your adjusted gross income, as well as how many children under the age of 17 you have. Here’s how the one-time, non-taxable payments break down:

  • Up to $1,200 per adult
  • Up to $2,400 for couples filing joint returns
  • $500 per child under the age of 17

However, the checks start to decrease by $5 for every additional $100 of income beyond the following income thresholds:

  • $75,000 for individuals
  • $112,500 for head of households (typically single parents)
  • $150,000 for couples who filed a joint return

Certain individuals with higher adjustable gross incomes aren’t eligible to receive a stimulus check at all. The checks completely phase out at the following income thresholds:

  • $99,000 for individuals with no children
  • $198,000 for married couples with no children

How does the government determine how much I get?

The government will determine the size of your cash payment based on the adjusted gross income (or your total gross income minus certain deductions, such as 401(k) contributions) and information reported on your 2019 tax return. For those who have not filed a 2019 tax return, tax returns from 2018 may be used instead to determine your check amount.

If you don’t typically file taxes and have no income — and instead rely on Social Security benefits — you are still eligible to receive a stimulus check. Instead of using information from your 2018 or 2019 taxes, the IRS will use information from Social Security beneficiaries’ 1099 documents.

“Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account,” Treasury Secretary Steve Mnuchin said in a statement.

When will I get my stimulus check?

According to the CARES Act, the cash payments should be made as “rapidly as possible.” On March 30, the IRS announced that the distribution of the payments will begin within the next three weeks.

It’s also worth noting that if you have signed up for direct deposit with the IRS and have chosen to have your tax refunds deposited electronically — as opposed to receiving your tax refunds by mail as a paper check — you will likely receive your stimulus check faster, too.

Still, experts have been critical of that timeline, and have instead said the payment process could take months, not weeks. In 2009, for example, the Internal Revenue Service (IRS) took three months to send out checks to households as a cushion during the Great Recession.

How will I receive my stimulus check?

You can expect your stimulus check from the IRS to be either directly deposited into your bank account or mailed to you, based on the method in which you requested to receive your tax refund. However, the IRS also announced that in the coming weeks, the Treasury Department plans to open a web-based portal in which people can share their banking information with the IRS, enabling them to receive their payments via direct deposit as opposed to waiting for a check in the mail.

If you have filed your 2019 or 2018 taxes, there is no action needed from you, and the IRS will issue your payment automatically. In fact, the IRS is actually asking consumers not to contact them about the stimulus checks, stating it will make details available on its website.

Determine how much you will get from your stimulus check

To find out how much you can expect to receive from your stimulus check, reference the table below.

What you should do with your stimulus check

As many Americans face furlough or unemployment as a result of the coronavirus pandemic, a recent survey by MagnifyMoney found that most people intend to use their stimulus checks on necessities, like paying bills and buying groceries.

Many experts recommend keeping the money you receive from your rebate liquid, like in an emergency savings account, which should have enough funds to cover three to six months’ worth of living expenses.

For more information on the rest of the stimulus package, refer to our hub page.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.