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              Researh Sevice

COVID-19 and Stimulus Payments to

Individuals: Summary of the 2020 Recovery

Rebates in the CARES Act (S. 3548)

March 20, 2020
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (S. 3548) proposes direct payments of
up to S 1,200 per person ($2,400 for married taxpayers filing a joint tax return) and $500 per child-2020
recovery rebates. Similar to the 2008 recovery rebates, these payments are structured as tax credits
advanced to households that file an income tax return. Taxpayers that filed a 2018 income tax return
would have this credit advanced to them in 2020, generally in the form of a direct deposit or check by
mail. Thus, these taxpayers do not need to wait until 2020 tax returns are filed in 2021 to claim the credit.
If they did not file a 2018 return, information from a 2019 return can be used for the advanced credit.
These payments are intended to broadly stimulate the economy in response to concerns about an
economic slowdown stemming from the COVID- 19 pandemic.
This Insight provides a brief overview of the proposed 2020 recovery rebates, with several simplified
examples to illustrate payment amounts for different families.

Calculating the Credit Amount
The credit equals the greater of
    1. the taxpayer's net income tax liability up to S 1,200 ($2,400 for married joint filers). Net
       income tax liability is the taxpayer's income tax liability before the child tax credit and
       refundable tax credits (like the EITC); or
   2. $600 ($1,200 for married joint filers) if the taxpayer has qualifying income. For the
       purposes of the basic credit, qualifying income is either
          (a) at least $2,500 of earned income, social security income, or veterans' benefits; or
          (b) gross income above the standard deduction and $I of net income tax liability.
All eligible taxpayers would receive the minimum basic credit of $600 ($1,200 married joint filers).
Taxpayers eligible for the credit can receive an additional $500 for each child that qualifies for the child
tax credit.
                                                              Congressional Research Service

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