When to Expect Coronavirus Stimulus Checks

Summary

WSJ Your Money Briefing — "When to Expect Coronavirus Stimulus Checks"

Date: March 27, 2020
Host: J.R. Whalen
Guest: Richard Rubin, Wall Street Journal tax reporter
Theme: Understanding the timeline, eligibility, and mechanics of the direct payments (stimulus checks) to U.S. households as part of the federal response to the coronavirus pandemic.

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Episode Overview

In this episode, host J.R. Whalen speaks with WSJ tax reporter Richard Rubin about the newly passed $2 trillion federal stimulus package aimed at supporting U.S. households during the coronavirus pandemic. The conversation dives into the details of when people can expect to receive their payments, how much they might get, eligibility rules, special considerations for unbanked and non-filers, and the package’s implications for taxes and future payments.

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Key Discussion Points & Insights

1. Direct Payments: What Are They and When Will They Arrive?

(01:33 - 02:32)

• Nature of Payments:
  The majority of Americans will receive their stimulus as direct deposits, not checks. The IRS will use direct deposit information from recent tax returns (preferably 2019, otherwise 2018).
  • "They’re not checks for most people. They’re going to be direct deposit payments... that’s the information the IRS is going to use." — Richard Rubin (01:33)
• Timeline:
  Estimated 3-4 weeks from passage for direct deposits; mailed checks will take longer, especially for those the IRS doesn't have banking info for.

2. Eligibility and Payment Amounts: Who Gets What?

(02:32 - 02:52)

• Basic Structure:
  • $1,200 for each adult taxpayer
  • $500 per child
  • Phase-outs start at $75,000 for individuals, $150,000 for couples.
• Exclusions:
  • Recipients must have a valid Social Security number.
  • Nonresident aliens, undocumented immigrants, and dependents who aren’t children (e.g., college students 17+, elderly dependents) are not eligible.
  • "You have to have a Social Security number to get a payment..." — Richard Rubin (02:56)

3. Do You Need to Apply?

(03:36 - 04:44)

• Automatic for Most:
  If you filed a tax return in 2018 or 2019, no action is needed.
• Special Cases:
  • Social Security recipients who haven’t filed returns: IRS will aim to coordinate with Social Security to deliver payments.
  • Low-income non-filers: Unclear as of this episode; may need to file a simple tax return or another form.
  • "For people who haven’t gotten Social Security benefits... then it gets a little dicey. We’ll have to see what the IRS says..." — Richard Rubin (04:04)

4. Tax Considerations

(04:44 - 05:15)

• Not Taxable:
  Payments are not considered taxable income.
  • "It’s really an advance... of next year’s tax refund. Not at all as a separate taxable event for you." — Richard Rubin (04:46)
• Accounting for Changes in 2020:
  If your 2020 income drops below the threshold, but you didn’t qualify based on your 2019 return, you’ll get the money as a refund or tax reduction when you file your 2020 taxes.
  • "You would be able to get the payment on your 2020 tax return..." — Richard Rubin (05:21)

5. Special Situations: Life Changes & Overpayments

(06:21 - 06:59)

• New Dependents:
  New children in 2020 don’t generate an immediate payment; they’ll be factored into your 2020 tax return.
• No Take-backs:
  If your stimulus was too large based on 2019 data, the government won’t "claw back" the difference.
  • "They’re not going to come take any of that money back." — Richard Rubin (06:59)

6. Will There Be More Payments?

(07:02 - 07:32)

• Possibility of additional payments depends on the pandemic’s duration and congressional action. The current law covers only one round.
  • "If the economy is still looking fragile... Congress may do this again. If things improve, maybe not." — Richard Rubin (07:02)

7. Considerations for the Unbanked

(07:32 - 07:59)

• Receiving a Check:
  Americans without bank accounts will receive checks, but will need to use check-cashing services (which typically charge fees).
• Debit Card Option Discussed:
  There’s some discussion about providing payments via debit cards, but details are undecided.
  • "There’s been some discussion of debit cards and we’ll have to see..." — Richard Rubin (07:59)

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Notable Quotes & Memorable Moments

• "You can think of it as an advance of next year’s tax refund, not at all as a separate taxable event for you." — Richard Rubin (00:50)
• "If you filed a tax return in 2018 or 2019, you don’t have to do anything." — Richard Rubin (03:41)
• "They’re not going to come take any of that money back." — Richard Rubin (06:59)
• "The IRS isn’t saying much about the mechanics of this yet... it’s only gone through the Senate... Congress hasn’t finished its job yet." — Richard Rubin (04:25)
• "This payment is not the only piece. The bill has enormous expansions of unemployment insurance... sometimes up to an additional $600 per week." — Richard Rubin (05:21)

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Timeline of Important Segments

• 00:36 — Start of main briefing
• 01:33 — Direct deposits vs. checks explained
• 02:32 — How payment amounts are determined
• 03:36 — Who may be excluded, special situations
• 03:41 — Do you need to sign up or apply for payment?
• 04:44 — Are the payments taxable?
• 05:15 — What if your 2020 income drops?
• 06:21 — Payments for new dependents
• 07:02 — Potential for future stimulus rounds
• 07:32 — Unbanked recipients and payment access

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Conclusion

This episode serves as a practical, clear guide to the upcoming federal stimulus payments, answering pressing questions about timing, eligibility, mechanics for receiving funds, and possible future aid. Richard Rubin provides clear explanations on who qualifies, what recipients must do (or not do), and how the government intends to deliver these urgently needed funds. The key takeaway: For most Americans, the payment process will be automatic and straightforward, though those with nonstandard situations (unbanked, no recent tax return, non-citizens, etc.) may face additional hurdles or delays.

Transcript

[A]

Access to affordable credit helps me pay my employees, but I don't really need it.

[B]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[A]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[B]

they need while increasing megastore profits. They deserve it, don't they?

[C]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.

[D]

Here's your money briefing for Friday, March 27th. I'm J.R. whelan for the Wall Street Journal. As part of the $2 trillion stimulus bill that looks set to pass Congress soon, the government plans to send out direct payments to US Households.

[E]

You can think of it as an advance of next year's tax refund, not at all as a separate taxable event for you.

[D]

That's Wall Street Journal tax reporter Richard Rubin coming up. He'll tell us when those checks are going to arrive and if there might be more to come in the weeks ahead. The $2 trillion federal stimulus package includes direct payments to most U.S. households to help them get through the coronavirus pandemic. But when it comes to actually getting your share, the devil's in the details. Let's bring in Wall Street Journal tax reporter Richard Rubin to discuss. So, Richard, first of all, when can we expect these checks to arrive?

[E]

Well, first of all, they're not checks for most people. They're going to be direct deposit payments. That's how most tax refunds are paid now. That's how a lot of tax payments are paid now. And that's the information the IRS is going to use for people who have direct deposit information on file with the IRS, especially from the 2019 returns, you can expect those payments to start coming in about three, three or four weeks or so.

[D]

But people who don't have direct deposit, can they still get a payment?

[E]

Yes, absolutely. That's not a barrier to getting checks. It just may take longer. It's actually interesting. The government used to have like big check printing machines and could print lots of checks and mail them out. They've actually dismantled a lot of that because so much has gone electronic. But to the extent that they don't have your information or your bank account has changed or something, then they're going to have to go through the process of sending out checks in the mail. And that's just going to take little while both to find people, particularly people who haven't filed tax returns recently, and then also to just get addresses and Put checks in the mail.

[D]

Now, can you just walk us through how the government will determine who gets what amount?

[B]

Yeah.

[E]

So the basic amount is $1,200 per adult, per taxpayer, per filer, and then $500 per child. And that starts phasing out for people with incomes starting at 75,000 for individuals and 150,000 for married couples.

[D]

Now, aside from the income factor who would not get a payment, you have

[E]

to have a Social Security number to get a payment. So if you are maybe someone who's here on a work visa or something and don't have a Social Security number, or you're a non resident or certainly people who are in the country not legally or undocumented or, you know, wouldn't qualify for that without a valid Social Security number. And then also dependents who are non children won't get separate payments. So you can think of if your support, if an elderly parent living with you and they're not sort of filing a tax return as their own household and they're dependent on your return, or you have a college age child, someone 17 or older, those people wouldn't be eligible for payments.

[D]

But for those who do qualify, do they have to sign up somewhere or apply to receive payments?

[E]

So here's the thing that's a little tricky that we don't know yet if you filed a tax return in 2018 or 2019, you don't have to do anything. If you haven't. That's where it gets a little bit more interesting, I think for people who have Social Security benefits and haven't filed tax returns, they're going to try and figure out a way, as much as they can to work between the Social Security Administration and IRS to get money to those people. The government has that, that information. They just have to have the systems talk to each other. For people who haven't gotten Social Security benefits, there are plenty of low income people who don't file tax returns. They just don't make enough money for that. Then it gets a little dicey. We'll have to see what the IRS about, whether they're advising people like that to file tax returns or a separate form or what they're going to do for those people in that category. And the IRS really isn't saying much about the mechanics of this yet, in part because it's only gone through the Senate. And so it's not law. The IRS's job is to implement the law that Congress lays out. And Congress hasn't finished its job yet.

[D]

Will the payments be taxable?

[E]

No, not taxable income. Here's how you can think of it. Say Your amount is $1,200. You can think of it like a $1,200 addition to the refund you would get next year. You're just getting it now. Or a $1,200 discount off the tax bill you would pay next year in early 2021. You're just getting it now. So it's really in advance of. You can think of it as an advance of next year's tax refund. Not at all. As a separate taxable event for you.

[D]

What happens if someone made a sizable amount last year, but their income dropped off in 2020?

[E]

There's two things that happen. One is if you're above those limits, then you would either get a smaller payment or no payment at all right now, but you would be able to get a payment on your 2020 tax return as part of that whole process. So maybe you could get the full 1,200. The other thing is to remember is that this payment is not the only piece of what the government is trying to do here. So the bill that's working its way through Congress right now has enormous expansions of unemployment insurance. So people who see their income go down because they become unemployed, and the definition of that is actually much broader than it used to be, will be able to get a lot of money, sometimes up to an additional $600 per week for a few months as a result of that, by going to your state unemployment office or state unemployment office system online and applying for benefits that way. And so you shouldn't necessarily think of these IRS payments is the only thing the government is doing. For people who really have those income drops due to lapses in employment, there is that other big avenue to go to now.

[D]

What if somebody qualifies for a payment based on their income in 2019, but they have a baby, you know, a new deduction this year, you don't get

[E]

the advance payment for that. So that $500 for child. For a child doesn't come until you file your 2020 tax return early next year. These upfront payments are based on the 2019 return, and then it gets reconciled on the return. But the important point about that is it doesn't get reconciled downward. So if you get more in this initial payment than you ultimately would qualify for based on your 2020 income and your 2020 family situation, they're not going to come take any of that money back.

[D]

Is it likely this could be just the first round of payments?

[E]

We don't know, I think that that's going to depend on Congress for sure. It's going to depend on what happens over the next few weeks with the virus. I mean, if we're in a place six, you know, four to six to eight weeks from now where the economy is still looking fragile, you might see some desire for Congress to do this again. If there's sort of better control of the virus and people are back to work sooner than people expect, then maybe not. The administration had been talking about two rounds of payments, but the bill only allows for this first round.

[D]

Now there are lots of people in the US without bank accounts who might not be able to deposit a check or receive direct deposit.

[E]

How can they collect payments so they may get checks. And, you know, unfortunately for people who are unbanked, you know, you would have to go to some sort of check cashing operation and probably pay a fee. The other possibility is there's been some discussion of debit cards and we'll just have to see whether they can make that work for people or not.

[D]

All right. That's Wall Street Journal tax reporter Richard Rubin. Richard, thanks for coming on the show.

[E]

Sure. Thanks for having me.

[D]

And that's yous Money briefing. I'm J.R. whalen for the Wall Street Journal.

[A]

Access to affordable credit helps me pay my employees, but I don't really need it.

[B]

Infliction is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[A]

See, banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[B]

they need while increasing megastore profits. They deserve it, don't they?

[C]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.