Recently a client called with this dilemma: “I’m probably going to get one of those government checks. But I don’t need it. I’d be embarrassed to take it. How can I return it?”
The government checks in question are the direct payments to individuals that are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress. Based on 2019 or 2018 tax returns, these checks will be $1,200 for single filers with adjusted gross incomes below $75,000, $2,400 for joint filers with AGI below $150,000, and an additional $500 for each dependent under age 17. Amounts are phased out for those over the AGI threshold. Estimates are that three-fourths of tax filers, or more, will qualify for these payments.
Some of those recipients, despite their qualifying AGI, will be fortunate enough to not to need the payments. Typically, they are likely to be retired, with paid-for homes, little or no debt, and stable sources of income that are more than enough for their needs.
If you are in this category and, like my client, would feel embarrassed to accept a check when so many others are in severe need, what are your options?
First, returning the check isn’t necessarily the best choice. There is no cap on the amount available for these payments, so if you keep your payment you are not taking it out of the pockets of someone else. Returning it would only put one tiny drop back into an enormous bucket. In addition, you are likely to receive a direct bank deposit rather than a physical check, so you couldn’t simply tear up a check or mail it back to the IRS instead of depositing it.
Second, keep the purpose of these payments in mind. The intent is to support local economies and provide relief to people who have lost jobs, seen self-employment income dry up, or been forced to close or drastically cut back their small businesses. If you don’t need your check yourself, you can use it in many ways that provide exactly that support and relief.
Here are some of the possibilities:
• Donate it to a food bank, a homeless shelter, or other charity providing meals and services to people in need.
• Pay rent for someone who has lost a job.
• Pay utility bills or buy groceries or other necessities for families who are hurting financially.
• Buy gift cards for future use at local businesses that are temporarily closed. You could even pass them on as gifts.
• Have a local restaurant deliver some meals to the staff at a local nursing home or medical facility to thank them for their hard work. You’ll support both the caregivers and the restaurant.
• Buy a couple of laptops or tablets to help families who don’t have adequate technology for kids’ online learning. (Basic laptops designed for students start at under $300.)
• Donate to a local organization such as a museum, arts center, community theatre, or concert association that has had to close facilities and cancel events.
• Simply share the cash with direct monetary gifts to people who are out of work, such as your hair stylist, massage therapist, or employees at a restaurant you patronize.
If you receive a benefit check that you are fortunate enough not to need, there’s no need to feel guilty or embarrassed. There’s no point in sending it back, either. Instead, you might choose to pass it on, in a spirit of gratitude, to someone who does need it. Using the money to help your neighbors would be an effective and personal way to fulfill its intended purpose.