CARES Act – Recovery Rebates for Individuals

By: Timothy Lynn

Amount of Rebate:

• $1,200 ($2,400 in the case of individuals filing a joint return)
• $500 per qualifying child

Eligibility:

• The credit phases out in an amount equal to 5% of a taxpayer’s adjusted gross income over the following limits:
o $150,000 AGI for joint returns
o $112,500 AGI for heads of household
o $75,000 AGI for all others
• Is allowed to any individual who is not a nonresident alien or any dependents of another taxpayer. Estates and trusts do no qualify
• Only children under age 17 are eligible for the $500 payment

Tax Treatment of Rebate:

• The law provides that it is treated as an allowed refundable tax credit.
• The rebate should not be taxable income to the individual