In late March, lawmakers reached an agreement on the biggest stimulus package in US history. And you might be getting a check.
Maybe. If you made less than $75,000 in 2019 (or 2018 if you haven’t filed taxes this year), you should get $1,200. Plus $500 for each kid under 17. If you made more, you’ll get a little less. If you earn over $99,000, you won't qualify.See how much you should get here. Some money has already gone out, and the gov launched a tool to help you see the status of yours.
Will I have to pay this money back?
Drumroll, please...nope. This one-time payment will not affect your 2019 or 2020 tax refund. And unlike unemployment benefits, you won’t have to pay income tax on it. If you get a sketchy email, call, or text asking for your bank info or to pay back some of the money, it’s probably a scam.
What if I got paid less than I was expecting?
Yeah, apparently that’s a thing that’s happened. Look out for a follow-up letter from the IRS. They’re sending them to confirm everyone got what they were supposed to. Once you get your letter, call and tell the IRS about the mistake.
Any other money coming my way?
The March stimulus package got more generous with unemployment benefits. If you lost your job, you'll get whatever your state usually pays for unemployment, plus an extra $600 per week through July. And those who aren't typically eligible for benefits including gig workers (think: Uber, Lyft drivers) and freelancers are covered.
Related: The 411 on Unemployment
I heard the law also makes it easier to take money out of your 401(k).
True. Usually early withdrawals mean you have to pay a 10% penalty, plus income taxes. Now, there's no penalty for up to $100,000 of retirement withdrawals if you can prove you've been impacted by the pandemic. You also get three years to pay the tax bill.
So...should I withdraw some to live on now?
Taking money out of your retirement account should always be a "last resort" kinda move. Especially if stock prices are lower than when you first bought in. (Remember: buy low, sell high.)
If you can afford to keep up your regular contributions, do that. Money you invest today can add up to a LOT by the time you’re ready to retire, thanks to what’s called “compounding returns.” That’s when your money starts making its own money. Yes, please.
The gov is trying to help people and businesses hurt by COVID-19 by loosening up some rules and mailing out money. If you got a stimulus check, think about the best way to use it. Psst...your emergency fund says hi.
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