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The federal government has paid tens of millions of Americans two stimulus checks as part of an effort to blunt the economic pain caused by the coronavirus pandemic, but many are wondering how the payments could affect your taxes by 2020 as the filing season nader kom.
Taxes played an important role in the way the government distributed the money: The first check, worth as much as $ 1200, was based on your 2018 or 2019 tax return, while the second check, worth up to $ 600, was based was on your 2019 return.
But in some cases, Americans did not receive the stimulus test, or did not receive the full amount to which they were entitled, given cases such as job losses or the birth of a child.
Here’s everything you need to know about your taxes and stimulus checks:
Am I owed tax on the stimulus money?
No, because the IRS does not consider the stimulus checks as income.
“The payment does not reduce a taxpayer’s repayment or increase the amount they owe when they file their tax return for 2020 or 2021 next year,” the agency said. “A payment will also not affect revenue for determining eligibility for federal government assistance or benefit programs.”
I think I received the wrong amount of money. What should I do?
Eligibility for the first payment of $ 1,200 is based on your 2018 or 2019 tax return, while the second check of $ 600 is based on your income tax return for 2019.
If you received the wrong amount of money, you can still receive the full payment: to do so, you must file a 2020 tax return and claim a recovery credit.
The IRS on Friday opened Free File, free tax preparation software, for taxpayers earning less than $ 72,000 to prepare and file their income tax returns. Americans can also claim their stimulus test using the tool.
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The IRS will start accepting returns on February 12 – usually the agency starts tax season at the end of January – because it needs more time to ensure that its systems can handle the credits that apply to the second stimulus payments.
“For 2021, eligible taxpayers who have not received the full amount can claim it as the Repayment Credit if they file their tax return for 2020,” the IRS said. “Use IRS Free File to file and claim this important benefit.”
I did not receive my stimulus test. What should I do?
The IRS had until January 15 to hand out the second stimulus payment of $ 600. If you do not receive the cash payment, you can claim a refund credit on your 2020 tax return.
Some Americans are not eligible to receive the cash payment: college students and dependents over the age of 17 do not receive the money, nor do immigrants who do not have a social security number. Some higher earners who received a check during the first round of stimulus payments also do not qualify for the second round.
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You can use the IRS’s Get My Payment tool to check the status of your stimulus test.
My income has changed since I filed my taxes last year. Am I eligible for stimulus money?
Single people earning less than $ 75,000 and couples earning less than $ 150,000 collectively could both receive the full stimulus payments. But millions of Americans have lost their jobs or reduced their income this year, due to the pandemic – which means many individuals who initially did not receive the money based on their 2018 or 2019 tax returns qualify.
If you think the IRS owes you incentive money, you can use a recovery rebate worksheet to calculate how much you should receive and claim the amount on line 30 on your 2020 tax return. The IRS will include your stimulus payments as part of your refund check.
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When can I expect my tax refund?
The IRS has asked Americans to file their taxes electronically this year, as the agency handles a backlog of nearly 7 million unprocessed paper returns from last year.
“If the filing season is opened without the proper programming in place, the delay in issuing refunds to taxpayers could be,” the IRS said in a news release.
The agency said it expects nine out of ten taxpayers to receive their refund within 21 days of being submitted electronically.