Direct payments to Americans are a key component of the historic $2 trillion coronavirus relief deal announced Wednesday.

The one-time payments are designed to help cover expenses for people experiencing financial setbacks due to the pandemic and the government’s efforts to prevent its spread.

“Struggling Americans are going to go to their mailboxes and find four-figure checks to help with their bills,” Senate Majority Leader Mitch McConnell Addison (Mitch) Mitchell McConnellGraham: GOP will confirm Trump's Supreme Court nominee before the election Trump puts Supreme Court fight at center of Ohio rally The Memo: Dems face balancing act on SCOTUS fight MORE (R-Ky.) said Wednesday.

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Here are five questions and answers about the relief checks.



How big will the checks be?

For individuals making less than $75,000 and married couples making less than $150,000, the checks will be $1,200 per adult and $500 per child under the age of 17. Those amounts phase out for taxpayers above the income thresholds, eventually zeroing out for individuals making more than $99,000 and married couples with no children making more than $198,000.

The original proposal from Senate Republicans would have phased in the check amounts, meaning some low-income households would not have qualified and others would have received a reduced amount. But the phase-in was not included in the final agreement, so low-income families are eligible to receive the maximum amount.



Who is eligible to receive a payment, and how is income calculated?

Most Americans qualify unless their income is too high, even if they don’t have any tax liability.

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The phase-out of the check amount is based on adjusted gross income, which includes income from wages, investments, and retirement benefits and distributions.

Income amounts for the payments made this year are based on 2019 tax returns, or 2018 tax returns for people who haven’t filed their 2019 return yet. For those who haven’t filed a tax return in either year, the IRS can look at income information in Social Security benefit and Railroad Retirement benefit statements to determine eligibility.

The payments are essentially an advance on a credit against 2020 taxes. People who receive advance payments based on their 2018 or 2019 income but qualify for a bigger credit amount based on their income this year will receive the remainder of the credit amount to which they are entitled when they file their 2020 tax returns next year.

Recipients will not have to pay any money back to the government if their 2020 income is greater than their income in previous years, according to a Republican aide for the Senate Finance Committee.



Who is not eligible?

People who don’t have a Social Security number, nonresident aliens, and estates and trusts are not eligible. Additionally, a household would not receive money for an adult dependent, such as an elderly relative or an adult child with disabilities.



How will the money be sent?

The Treasury Department and the IRS would be responsible for distributing the money. The IRS can disburse rebates to people electronically to accounts authorized for tax refunds or other federal payments on or after Jan. 1, 2018.

Otherwise, recipients will likely receive their check in the mail. The Finance Committee aide said the IRS is looking to see if they can deliver the money through debit cards mailed to people instead of paper checks, which would get the funds to people faster.

The legislation directs the Treasury Department to work with the Social Security Administration and other agencies to conduct a public awareness campaign about the checks.



How quickly will people get the money?

Treasury Secretary Steven Mnuchin Steven Terner MnuchinShutdown clash looms after Democrats unveil spending bill Lawmakers fear voter backlash over failure to reach COVID-19 relief deal United Airlines, unions call for six-month extension of government aid MORE said at a press briefing Wednesday that the administration expects to have the money to recipients within three weeks in cases where the IRS has direct deposit information for taxpayers.

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According to a paper from the Tax Foundation, in past cases where the federal government has sent direct payments to people during downturns, the amount of time between a law’s enactment and distribution of the payments has ranged from about six weeks to more than two months.

The Republican committee aide said refunds that can be distributed electronically could start to be pushed out in a few weeks, but paper checks take longer because the Bureau of Fiscal Service is constrained in how many checks it can push out at a time.

John Koskinen, who served as IRS commissioner from 2013 to 2017, said a key issue is how easy or difficult it will be for information technology systems at the IRS to be programmed to produce a database of eligible taxpayers, along with their addresses and bank account information.

He also said the IRS has a “dedicated workforce” that will make the payments a priority.

“This won’t be business as usual,” Koskinen said. “They will do whatever they need to get this done as quickly as possible.”

Tax experts said there could be challenges in getting the checks to some populations, such as people who have moved since they last filed a tax return or those who don’t file tax returns.

“The challenge will be reaching individuals who don’t file tax returns but do not claim Social Security benefits,” said Nicole Kaeding, a vice president at the National Taxpayers Union Foundation. That group tends to be people who are low-income adults who are not elderly or disabled, she added.