While challenging times can bring out the best in people, there are also individuals who view these times as opportunities to prey on those most vulnerable by trying to steal money, identities or both. The novel coronavirus (COVID-19) pandemic has caused significant disruption to both domestic and international economies and led governments to impose various forms of social, travel, and work restrictions. As a result, there are many people in our communities that are experiencing significant financial hardship. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was recently signed into law and is designed to bring assistance to those in need.
One of the items included in the CARES Act is a direct stimulus payment (economic impact payment) to individuals, married couples, and children who qualify. The CARES Act provides direct payments of up to $1,200 for single filers and $2,400 for married couples filing jointly, plus $500 for each child under 17. Children who are, or can be, claimed as dependents by their parents aren’t eligible individuals even if they have to file a return. Income limits apply, for single filers the phase-out range begins at an adjusted gross income of $75,000 and completely phases out at $99,000. For married couples the phase-out range begins at $150,000 of adjusted gross income and completely phases out at $198,000. 2019 tax returns, if they have been filed, will be used to determine eligibility. If a 2019 tax return has not been filed yet, the payment will be based on the 2018 return. This means that taxpayers who receive a smaller payment than they are eligible for based on 2020 income will receive the difference after filing a 2020 tax return, but overpayments due to a higher income in 2020 are not expected to be due back.
This provision provides relief for individuals and families who are struggling financially right now, however, the desire to receive this money quicker leaves people vulnerable to scammers. By keeping the following in mind, you can protect yourself, and those you care about, from falling victim to fraud:
The federal government will NOT contact you. Federal offices will NOT contact individuals directly via phone, email, or text to verify personal or bank information. If someone contacts you claiming additional information is necessary to process your economic impact payment, immediately cease communications and report the number or email address.
There is not a faster way to get the economic impact payment. If someone claims they can expedite your check, know that this is a scam. Currently, the payments are expected to go out in the next three weeks.
You do not need to pay anything! There are no processing fees involved in receiving your economic impact payment. If anyone contacts you regarding a small fee to authorize the payment, know that it is a scam.
Communicate directly with the IRS. If you’d like to set up a direct deposit of your stimulus payment, communicate only with the IRS directly. The United States Department of the Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, which will streamline distribution. If your bank information was already provided to the IRS on your 2018 or 2019 tax return, no further action will be required. If the federal government does not have your bank information, they will send a hard check to your home address.
No need to sign up or file a simple tax return. Social Security recipients who are not required to file an income tax return will not need to file a simple tax return to receive a payment. Rather, the economic impact payments will be automatically deposited into your bank account, as is the case with the normal monthly payments received.
Watch out for fake checks! Some people have reported the receipt of economic impact checks in the mail for odd amounts, including ones with cents. It is going to take the United States Department of the Treasury a few weeks to mail out hard checks, so if you receive one too early, it is likely a scam. Also, these early, fake checks may ask you to verify the check online or by calling a certain number; these are signs of a scam!
If you do identify any coronavirus-related scams, you should report them to the Federal Trade Commission.
Hopefully, the information above will provide you with the awareness and information that you need to avoid falling victim to a scam related to the economic impact payments. We are all in this together, and together we will make it through this stronger than ever. If you have any questions related to the economic impact payments and/or the CARES Act, our team of professionals stands ready to assist you. Please give us a call at (401) 921-2000, or fill out our online contact us form.
For more information on COVID-19 and to get the latest updates, visit our COVID-19 Resources page.