Sunday, April 19, 2020

5 Groups of People who owe money to their bank

zabit magomedsharipov

While there are numerous provisions contained within the CARES Act to prop up an ailing economy -- including $500 billion in loans to distressed industries, $350 billion in small business loans, and even $260 billion to bolster the unemployment program -- it's the $300 billion set aside from direct stimulus payments to working Americans and seniors that's garnered most of attention.

It's been 22 days since the House of Representatives passed, and President Trump signed into law, the largest stimulus bill in U.S. history. The Coronavirus Aid, Relief, and Economic Security (CARES) Act totals a whopping $2.2 trillion in aid and is a direct response to the record-breaking economic and labor-market turmoil caused by the coronavirus disease 2019 (COVID-19).

According to estimates, somewhere in the neighborhood of 140 million American households will receive an Economic Impact Payment -- or as most folks know it, a "stimulus check." The most money single filers and married couples filing jointly can hope to receive are $1,200 and $2,400, respectively, with stimulus recipients potentially netting an additional $500 per qualifying child aged 16 and under.

But at the other end of the spectrum are millions of Americans who won't receive a dime from this $2.2 trillion coronavirus relief package. Here are five groups of people who are unlikely to see any stimulus payouts.

The first group of people who won't be receiving a stimulus check is those who make too much money. As outlined by the CARES Act, single taxpayers making more than $99,000 in adjusted gross income (AGI), married couples filing jointly with over $198,000 in AGI, and head-of-household filers surpassing $136,500 in AGI isn't eligible for an Economic Impact Payment.

However, there's a bit of a catch to this rule. The Internal Revenue Service (IRS) is determining stimulus check eligibility by an individual's or couple's most recent tax filing. If, say, you made $70,000 in AGI as a single filer in 2018 but made $125,000 in AGI in 2019, you could choose to delay your 2019 tax year filing until July 15, 2020

Lastly -- and I fully admit this is a pretty broad-spanning and somewhat vague umbrella -- people who owe their bank money may not see any of their stimulus payment. There's specific language in the CARES Act that prohibits federal and state debt collectors from seizing Economic Impact Payments to cover outstanding debts, but banks, which are private debt collectors, aren't guided by those same rules. Since the stimulus check is a tax credit and not a federal benefit, it gives banks the right to utilize this money the moment it's deposited into your account to satisfy what you owe.

What might banks use your stimulus check to cover? In theory, anything. Everything from overdraft fees to an outstanding loan is fair game for your bank to utilize your stimulus payout to offset what you owe.

The big question is whether or not banks will actually use this tactic to offset consumer debts. Among big banks, only JPMorgan Chase and Wells Fargo have thus far stated that they would not use stimulus payments to offset customer debts. This likely casts doubt among the tens of millions of folks who don't bank with JPMorgan Chase or Wells Fargo.

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