If you receive a COVID-19 stimulus check, will it impact your 2020 tax return?
The short answer is no. The $1,200-per-adult and $500-per-dependent stimulus payments will not impact 2020 tax refunds.
The common misconception seems to have originated because the payments are technically tax credits applied to 2020 tax returns, but given to taxpayers now. However, it is not part of an advance on whatever refund you were already set to receive. The stimulus is a credit on top of whatever 2020 refund you might be due next year.
Depending on income, some people will receive less than the full $1,200 or $500 credits. The IRS is using 2018 and 2019 tax returns to determine the amount to send to taxpayers now.
But ultimately, the money received is based on your future tax filing for 2020. This means that if the IRS pays you less than what you would receive if they had your 2020 tax return, you should eventually receive the rest of that payment in full. But the reverse is not true: If you are “overpaid” in stimulus money because the IRS used your 2018 tax return and you made less in 2018 than 2019, there is no mechanism for them to request it back or tax the money you received (The same is true if you made less in 2019 than 2020).
How do I know if I will get a refund?
The fourth coronavirus stimulus package, The CARES Act, is the bill that established whether or not you can receive a stimulus payment. You do not need to apply to receive a stimulus payment, but the IRS needs to have your 2018 or 2019 taxes on file. They will use this information to determine if you are eligible. If you are a non-filer, but still qualify, you can now enter your information here on the IRS website.
Individual taxpayers making up to $75,000 in adjusted gross income will receive $1,200 checks and $500 for each dependent child under 16. Married couples will each receive the same ($2,400), if they earn under $150,000. After that, the credit amount sent decreases.
Individuals making over $99,000 and couples making above $198,000 will not receive the payments. Taxpayers who file as “head of household,” but are unmarried, are limited to an income of $146,500.
What if I was claimed as a dependent on someone else’s tax return?
Whether or not you or the person claiming you gets a payment depends. Households with children 16 or under claimed as a dependent should receive a $500 check for each. But those 17 or older who were claimed as a dependent do not qualify for a $1,200 or a $500 payment, even if they are college students above the age of 16 and under the age of 24.
Sen. Tina Smith and Rep. Angie Craig currently have a bill that aims to fix this in the next coronavirus stimulus package: the All Dependents Count Act. Their bill would expand the qualifying age of a dependent under the CARES Act to 19. It would also allow you to qualify for a check for young people up to age 24 if you are a dependent and a student, and beyond 24 for individuals with disabilities.
When will I receive my refund?
The Treasury Department says that around 80 million Americans will receive their stimulus payments this week.
If the IRS has your bank account information from a previous direct deposit, the money should be deposited directly into your account. On Wednesday, the IRS launched “Get my Payment,” a tool where you can check the status of your return. Although, according to the Washington Post, many people are having problems with the tool. Additionally, millions of people may be temporarily ineligible for direct deposit if they filed their taxes through HR Block or TurboTax, because of the way the companies distributed tax refunds. The IRS is working on a fix.
If the IRS does not have your information, it may take several months for them to send out paper checks.
Good job, Thanks. I appreciate you.
So, who will pay for the $1,200 I received? Nothing is absolutely free.
In the long run, those who received money will most likely pay for it via higher taxes, lower social security income, higher health care expenses, etc., etc., etc…. And those who borrow the $1,200 to the Federal Government (via Savings Bonds) will, over time, be repaid with interest by those who received the money.
But, if the President and McConnell are OK with simply printing more money and handing it to us, what happens? Well, you and your children and grandchildren will eventually hold worthless dollar bills (like what has recently happened in Venezuela).
But will the few super-rich Americans be forced to pay your $1,200?
No. This year’s first trillion dollar debt resulting from the GOP’s tax cut went mostly to the rich. The GOP will never make rich Americans pay for the two trillion now being handed to more normal Americans.
In summary, nothing is free. Most likely you’ll have to pay your $1,200.
To the point, the stimulus payments are not taxable. From the IRS cite in the article: “The Treasury Department confirmed that to us in an email, and the IRS website explains, “the Payment is not income and you will not owe tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 tax return next year.”
I’m currently residing in adult foster care and I’m on UCare and grh pays for a portion of my rent which I am not able to pay will this affect my stimulus check at all