What Should I do with My 2020 Stimulus Check?

What Should I do with My 2020 Stimulus Check?

As the world continues to work to mitigate the health impacts of COVID-19 via social distancing, there are devastating impacts happening to the financial health and well-being of individuals, businesses and entire communities. Fortunately, the US government has taken swift action to pass another stimulus bill to help ease the financial burden the pandemic is placing on American families and businesses.

The recent headlines about the stimulus package are likely leaving you with more questions than answers. This article aims to answer those questions about the second stimulus check and provides tips on how you can most effectively use it. If you’re still looking for your first stimulus check, use the IRS’ Get My Payment tool.

How much is the stimulus check?

The legislation states that single Americans will receive up to $600, married couples will receive up to $1,200 and parents will receive $600 for each child under the age of 17.

Will I get a stimulus check?

While most Americans are expected to receive a stimulus check, there are guidelines in place as to who gets a check and how much that check will be. Individuals who earn up to $75,000 in adjusted gross income (AGI), married couples who earn up to $150,000 AGI, and head-of-household filers earning up to $112,500 AGI may receive the full amount. Individuals and couples who exceed these income thresholds may still receive a check. However, the amount decreases by approximately $5 per every $100 of additional income. Individuals with an AGI above $87,000, couples earning more than $174,000 AGI and head-of-household filers with an AGI above $124,500 and are not eligible for a stimulus check.

Your income eligibility is determined by your 2019 tax return. Additionally, the tax returns must be filed using a Social Security Number in order to be eligible for a stimulus check. Those filing with Individual Tax Identification Number are not eligible.

Americans receiving Social Security benefits, including retirees and people on disability assistance, also qualify for a stimulus check. The same income requirements apply and since many retirees no longer file tax returns, the government will obtain their income data through the Social Security Administration to determine the rebate amount.

When will I get my stimulus check?

Stimulus checks started being direct deposited in accounts on December 29, 2020. If you are expecting a stimulus check but haven’t received it yet, you can check the status using the IRS’ Get My Payment tool.

How will I get my stimulus check?

Americans receiving a stimulus check will see it deposited into their bank account if the IRS has their bank account information on file. Otherwise, the checks will be delivered via mail.

How should I spend my stimulus check?

The stimulus package was created and passed in order to help individuals weather the financial storm created by COVID-19. While you may spend your check as you see fit, here are some suggested ways to spend it in order to have the greatest impact on your wallet and your community.

• Pay Monthly Bills
  If the impacts of COVID-19 have impacted your ability to work and pay your monthly bills (mortgage/rent, utilities, food, medical needs, insurance, etc.), use your check to help pay for these items.
• Build Your Emergency Savings Account
  If there is one thing we can all learn from COVID-19, it’s that unexpected things can and do happen that have a negative impact on our finances. Use the stimulus check to prepare for the next unforeseen circumstance by using it to build your emergency savings account.
• Pay Off Debt
  If you are able to pay your monthly bills as you did before COVID-19, consider using your stimulus check toward paying off existing debts that you have. Your future self will thank you.
• Support Local Businesses
  Social distancing has forced small businesses to limit their hours and operations and/or close temporarily. This will undoubtedly have a negative impact on their bottom line. Consider supporting local small business so that they can stay open and pay their employees by using your stimulus check to place online orders, purchase gift cards for future use, or ordering take-out form restaurants.
• Donate
  Everyone has a role to play when it comes to overcoming COVID-19 and the devastation this virus will leave in its wake. By working together, we will weather this storm and we will be all be stronger because of it. Consider using your stimulus check to support one or more of the local and national efforts related to overcoming the devastating impacts of the pandemic.  A few examples can be found here.