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May 20, 2020, 11:11 a.m. EDT

‘I was punished for being responsible. I filed my 2019 taxes early — and received almost no stimulus check’

‘Is there anything I can do? I find this very unjust and poorly thought out’

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By Quentin Fottrell, MarketWatch

The Moneyist answers dilemmas in an age of coronavirus.

Dear Moneyist,

In 2018, I made about $155,000 with my wife. In 2019, I got a promotion and our combined annual income was $198,000. I filed my taxes early as I am very responsible, and now I found out that, had I had not filed my 2019 taxes, we would have received a combined $2,400 versus the $200 we just received. I am in the odd and, perhaps, very unlikely situation in which the government screwed me for being conscientious, and filing my taxes early. I was punished for being responsible. Is there anything I can do? I find this very unjust, and poorly thought out.


Dear John,

I don’t disagree with the facts in your letter. I do disagree your interpretation of those facts.

You are correct that you would have received a far larger stimulus check had you not filed your 2019 taxes early. The legislation was rushed through Congress and, while it’s certainly not perfect and some Democratic lawmakers say the CARES Act gives more support to corporations than individuals, it’s still a sum of money that could mean the difference between paying the rent and putting food on the table and paying electricity bills, and not paying them.

The Internal Revenue Service is sending $1,200 to individuals with annual adjusted gross income below $75,000 and $2,400 to married couples filing taxes jointly who earn under $150,000, plus $500 per qualifying child. The payments begin to shrink above those levels. It’s certainly frustrating for people like you who are just above those thresholds and will receive less or no money from the $2.2 trillion CARES Act. Contrary to your take on this, I would not call it unjust.

Dispatches from a pandemic: ‘When I hear an ambulance, I wonder if there’s a coronavirus patient inside. Are there more 911 calls, or do I notice every distant siren?’

There must be a line drawn in the sand, just like the line that says once you earn over a certain threshold, you pay more income tax on that amount than someone who earns less. It would be a less equitable CARES Act if the money simply stopped after $150,000 for a married couple who file jointly. Attempting to control things that are out of our reach can make us feel angry and seek to blame others — in this case, the government. It’s a natural, if flawed, reaction.

There are a lot of people who are crying foul. For instance, there’s growing concern among some Americans — especially those who are most in need of the checks and already have bills piling up — that debt collectors will garnish or swipe their checks before they can put the money toward rent, or utility and food bills. Members of ACA International, the association of credit and collection professionals, said that members will endeavor to work “diligently” to help consumers.

Also see: ‘In 2019, tax-law changes made it advantageous for me to claim my oldest as a dependent. I now regret doing that’

Someone with no outstanding debts and a mountain of bills might argue that they are more deserving of a $1,200 payment, or even more. For every person who does not qualify for the largest stimulus check, there will be another who says, “Why not me?” You did not receive a large Economic Impact Payment because you filed your taxes early. But if you peel that back further: You did not receive a large stimulus check because you and your wife earned far more than $150,000 last year.

Here’s the good news: The Internal Revenue Service will also assess your eligibility for the stimulus check based on your adjusted gross income from 2020, so if you earn below the threshold this year, you will likely receive the difference in your refund. That seems like a good way to deal with the issue you are describing. However, if you still don’t qualify for a stimulus, you will not receive one in 2021 based on what would then be your three-year-old income.

There are people who are desperate for $1,200. You’re in a far stronger position. The CARES Act is far from perfect. It’s not using the same measure for everyone: The IRS is using 2019 returns when they are available because they are the most recent/accurate representation of your ability to get through these next few months. The IRS needs to get money to people as fast as possible. Perhaps it could have taken an average of 2018/2019 returns for those who already filed last year’s taxes.

Also see: More than half of renters say they lost jobs due to coronavirus: ‘They could face housing situations that spiral out of control’

You will not be able to convince the IRS to send you a $1,200 stimulus check based on your two-year-old tax return. The IRS is using 2018 tax returns as a Plan B for those who did not file their returns for last year. It’s not a Plan A. It's a tough pill to swallow, but there are many people out there living paycheck to paycheck. You filed early. You don’t qualify based on your most recent income filed to the IRS. Take heart that those who need it the most will hopefully receive their payment.

<STRONG>You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com</STRONG>

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Quentin Fottrell is MarketWatch's personal-finance editor and The Moneyist columnist for MarketWatch. You can follow him on Twitter @quantanamo.

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