How much will you receive and when will you receive it?
There has been much talk about the COVID-19 stimulus funds that are now being distributed by the federal government pursuant to the CARES Act. On average, most taxpayers will receive a payment of $1,200.00 although the amount will phase down and eventually phase out for those with adjusted gross incomes over $75,000.00. For straight facts on the amount and distribution of stimulus funds and other details click here.
What will happen to the funds once you receive them?
Hopefully you will have control over the funds. Fortunately, the funds will not be garnished for debts owed to federal or state government…but private debt collectors can garnish or levy on funds. Apparently, the Congress and our President failed to provide full anti-garnishment and anti-levy protection in the CARES Act. A few states have stepped in and prohibited private debt collectors from seizing the stimulus funds but North Carolina is not one of these states. Therefore, if you are a North Carolina resident who owes on an unpaid judgment a private debt collector could be lurking and pounce in time to grab the stimulus funds before you do. How can you avoid this? One method is to check your bank account daily to see if the funds have been deposited and immediately withdraw or transfer them once they hit your account. Obviously if you receive your stimulus funds via check you are clear of a private debt collector grabbing the money so if you owe on an unpaid judgment perhaps you should see if you can opt for a check instead of direct deposit. Note, however, that the IRS may not allow you to opt out of having the funds sent to an active account which is already on file with the IRS. Getting a paper check is easier if you have not filed taxes or provided bank account information to the IRS in 2018 and 2019 and if you do not already receive Social Security or Railroad Retirement benefits.
Now assuming you are not facing garnishment or levy and will receive the full amount due to you for this COVID-19 stimulus. What to do with the money? A few ideas come to mind:
- Pay down/off some debt
- Save some
- Invest the money into a business venture
$1,200.00 is nice to have right about now but it is not a huge sum of money in the grand scheme of things and we all realize that depending on where one lives in the United States it may not stretch very far. Be wise with the money and do not fall prey to any scams or ripoffs. Here’s hoping that you receive your money and are able to make good use of it in good health going forward.