According to reporting from the Washington Post based on internal documents the newspaper obtained, the IRS draft plans suggest the coronavirus stimulus payments to individuals and families would start on Thursday, April 9.
The first recipients will be those that have direct deposit information on file with the IRS from 2018 or 2019 tax returns. The direct deposits wave should be completed by April 14 at the latest, the Post reports.
It is believed up to 80% of taxpayers who received refunds in previous years have provided direct deposit information to the IRS, others will have to wait on paper checks.
“If we know where to put the money, we’re going to press the button and put it there next week,” an anonymous IRS official told the publication.
Payment Schedule For Coronavirus Stimulus Paper Checks
After the first wave of direct deposits is completed, the Post reports the IRS will implement a weekly schedule of paper check mailings starting on April 24, based on reported income from the 2018 or 2019 tax filings.
The IRS plans to start with the lowest-income taxpayers making $10,000 or less and then moving up the weekly paper check mailings in $10,000 increments.
Based on the draft plan, this is what it would look like in the first few weeks when paper checks are mailing out:
- April 24, Taxpayers earning $10,000 or less
- May 1, Taxpayers earning $20,000 or less
- May 8, Taxpayers earning $30,000 or less
Assuming the IRS stays with the $10,000 increments beyond the first few weeks, in theory, it could take 5 months to distribute all checks going all the way up to joint taxpayers making $198,000, which is the maximum eligible income for the stimulus package.
The Post also reports the IRS had initially considered $25,000 increments but believed $10,000 was more reasonable to manage.
Over the last few hours, there have been more reports from other news outlets on this plan that include some minor differences.
It is possible that as paper checks start flowing out and the number of taxpayers with higher incomes reduces the amount of the checks to be processed, the IRS could speed up the mailings.
Also, Treasury Secretary Mnuchin said that a web portal for individuals to provide direct deposits is in the works as well.
Regardless of the minor differences in the reporting or some small inconsistencies between official statements and anonymous reports, the government is trying to get this program moving as time is of the essence to help families and individuals, especially in the lower-income tiers.
Some Positive News For Small Business Owners and Part-Time Sellers
While many small business owners are concentrating on the SBA loan programs that are being offered through the same legislation that authorized the direct payments, these payments are also important to them and their employees to weather the current crisis.
Especially, part-time sellers on marketplaces such as eBay or Etsy that often need that little bit of extra income from sales that may have evaporated over the last few weeks will find a slight relief in knowing the direct payments appear to be soon on their way.
Unfortunately, the coronavirus (COVID-19) crisis is far from over, and it may require more stimulus packages to overcome the rapid economic downfall that is impacting so many families and small businesses.
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