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Stimulus Checks and Your Taxes for 2020: All the Important Things You Need to Know



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If you haven’t received your stimulus money, your taxes are now more important than ever.

Angela Lang / CNET

Tax season starts in just 10 days, when on Feb. 12 the IRS starts accepting tax returns, and the better you’ve been, the less painful filing your income taxes will be – especially since incentive checks could be a part of your taxes this year. Taxes and your direct payments were tied together for the first two rounds, and your filing status will be crucial to the third stimulus checkalso – even if you are a non-finder. For example, if you know how the IRS calculates the amount you owe can tell you whether to expect a full or partial check – or not at all.

This year’s tax season will also be a bit different as the IRS uses this year’s return (for taxes on your 2020 income) to make amends missing incentive payments. Someone who did not receive a second stimulus check shortly after the January 15 deadline, it can claim money as a Refund Discount, which the agency built directly into the tax filing process. And if you submit a file, it is a good idea to sign up for direct deposit with the IRS, if you haven’t already.

With layers of complications to navigate and tax season 2020 just around the corner you have time to pick up the paperwork you need to claim a payment. We explain how tax returns and your stimulus controls go together, how you dependent persons figure in, or payment counts as taxable income and everything else you need to know. By the way, here’s the status of one third stimulus check for maximum $ 1,400 per qualified adult.

I never got my second stimulus check, so what should I do? What is a recovery discount credit?

The December stimulus bill mandated a January 15th cut-off for the IRS and the U.S. Treasury send the second stimulus payment to bank accounts and through the post as a paper check or EIP card. Unless the IRS mailed your check by the deadline or your payment caught up a direct deposit with tax preparers, you must claim money from the $ 600 stimulus check when you file your federal tax return this year as a Recovery Rebate Credit on 2020 Form 1040 or Form 1040-SR.

You can also claim money the IRS owes you from the first round of stimulus checks, approved last spring – millions are one catching up for dependent children.

To help you determine if you are missing a payment and for how much, the IRS provides a recovery discount worksheet. You need the IRS’s calculated amount of the letter that the agency will send you, named Notice 1444 for the first payment and Notice 1444-B for the second payment.


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When can I claim an incentive credit on my taxes?

According to the IRS, you can claim a missing payment of your taxes for the next several weeks, with payments occurring after mid-February. You can start preparing your taxes now – through the free file tax preparation service, if you qualify – or through a tax return service. The first day the IRS begins accepting and processing individual tax returns is February 12 The deadline for tax returns is April 15 this year, but you can a tax extension if you can’t meet the deadline.

What if I wait until the April 15 deadline to file my tax return?

April 15 is the due date for all tax returns for 2020, but filing your taxes earlier won’t be possible on your own speed up delivery for any tax returns you could collect, it will also position you to get one lack of incentive money weeks or even months faster. We made a handy comparison table here that looks at the timing.

Will filing my taxes this year speed up or delay my third incentive check?

It depends on. Since a third incentive payment has not yet been completed, we can only guess when the next round of incentive payment comes, is one way to potentially set yourself up to receive it first sign up for direct deposit with the IRS, if you haven’t already.

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The IRS uses your recent tax returns to calculate the size of your incentive payment.

Angela Lang / CNET

What if I am a ‘non-filer’ and have no obligation to file my taxes?

According to the IRS, tax non-filers must also submit a file Form 1040 or Form 1040-SR to get it Refund Discount. The IRS says anyone with an income of $ 72,000 or less can file a federal tax return for free through the IRS Free File service.

Do I have to pay tax on the stimulus check money I received?

No one incentive payment doesn’t count as income, so you don’t owe tax on it, the IRS has said.

I did not submit my tax return in 2019. Am I still eligible for benefits?

If you didn’t have to file a 2019 tax return because you were below income limits or you receive federal benefits such as Social Security (including through SSI and SSDI programs), you may still be eligible for benefits. Up to 9 million people who fell into this non-affiliates category had an initial incentive payment due since last fall.

While many people in this category should have received their second payment automatically, if the IRS doesn’t send your money in at the start of the tax filing season, here’s what you should do file a federal tax return this year to claim your missing payment with the Refund Discount, the Tax Foundation said.

How is my stimulus check total related to my tax returns?

The IRS uses the adjusted gross income, or AGI, from your federal tax return for 2019 to calculate how much of the $ 600 payment and how much of your future payment your household will receive. (We explain it here how the IRS calculates your total payment.) Your AGI may be a different figure than your annual salary or take home salary as it is based on several factors.

How are taxes, incentive checks, and dependents linked?

You could receive for the second check up to a payment of $ 600 in front of each dependent under the age of 17 that you claim on your taxes. The definition was narrower than for dependents who would qualify for certain rebates under tax law, including children aged 17 and older, dependents of any age with disabilities and older adult relatives.

The third stimulus check below Biden’s $ 1.9 trillion proposal would like to broaden that definition for the proposed $ 1,400 payment. (This is what we know about the timeline.)

Am I eligible for incentive money if I lost my job or got a new one since filing my taxes last year?

If your financial situation has changed after you filed your 2019 tax return – for example, you received less income – you can claim that extra amount on your 2020 tax return when you do this year.

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If you didn’t have to file a tax return, you may still qualify for a stimulus check.

Angela Lang / CNET

Will the incentive payment I received affect how much I owe in this year’s taxes?

If you received a payment last year, your tax refund will not be reduced or what you owe when you file your 2020 tax return this year. Payment also does not count as income to determine whether you qualify for federal government assistance or benefit programs.

Could My 2019 Tax Returns Help Get My Missing Incentive Money Faster?

Depending on your personal tax situation, the Recovery Rebate Credit for your missing incentive money would either reduce the total amount you owe the IRS or give you a larger amount tax returns.

If the IRS has your direct deposit information from a previous federal tax return, the agency will attempt to do so deposit your check into the bank account you specified. However, if you receive your tax refund by check in the mail, or if the IRS info or your bank information is out of date, the agency will mail your refund. The IRS did not accept it instant deposit information for the $ 600 check, but you should consider getting a new direct deposit account with your tax return for 2020.

Do I have to return my incentive check if I qualify for less with next year’s taxes?

You do not have to repay an incentive fee if you are no longer eligible for the amount received based on your 2020 tax return. Here’s when the IRS expects you to return full or partial payments for stimulus checks.

Can the IRS decorate my incentive payment to cover other expenses I owe, such as federal taxes?

For the second check, the IRS will not lower your stimulus payment to cover it child benefit arrears you owe, and debt collection agencies cannot decorate your payment one of both.

However, the protections of the Consolidated Appropriations Act that prevented the IRS from clearing your unpaid tax incentive check does not apply to people who claim their missing stimulus controls on their tax returns. “If you are an eligible person who has not yet received your full EIP and you have certain outstanding debts, some or all of your unpaid incentive payments will be withheld to offset those debts,” the Taxpayer Advocate Service said in a blog post. The IRS is investigating this problem.

For more, here is everything you need to know about stimulus controls.


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