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Would the third incentive check use 2020 or 2019 taxes? Everything is complicated



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Your next incentive check may be based on your 2019 or 2020 tax return.

Sarah Tew / CNET

Although more of it President Joe Biden’s $ 1.9 trillion stimulus plan steadily emerging after a week of work in the House of Representatives, there are some important questions open. When it comes to one third stimulus check from up to $ 1,400 per person, for example (including dependent persons,) the current proposal would be the IRS processes the following stimulus control in the middle of tax season

Would the tax authorities be your Tax return 2019 or 2020 to determine your total payment? What happens if your income has changed in the past year? And what if your third check never arrives or if money is missing?

We have answers for you according to the most recent proposal for a third stimulus check and how it will be run. Check back regularly for more updates.

Why would your third stimulus check arrive during tax season?

House Speaker Nancy Pelosi said she expects Congress to have a final bill ready for Biden to sign the law on March 14. some unemployment benefits lapseIf Congress follows that timeline (which it can, because of a legislative instrument that Congressional Democrats use to push through Republican opposition), a third stimulus check could come during tax season, which lasts until April 15

This makes things a bit more complicated. First, the IRS is already inclusive catch-up incentive money from the first two checks with your tax refund this yearIt also means the IRS will likely use the tax return they most recently filed (more below).


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Will the IRS base your third incentive check on your 2019 or 2020 taxes?

The most recent Democratic Proposal (PDF) states that the IRS would determine your total third stimulus payment based on your adjusted gross income (AGI) of your Tax returns 2020 or 2019 – what the IRS has last on file at the time of payment.

This can have various consequences. For example, if you made more in 2020 than in 2019, but the IRS uses your return for 2019 (and gives you more incentive money than you may qualify for), then you don’t have to return that money (more below).

The IRS is now accepting tax returns for 2020. For several reasons, we recommend filing your taxes as soon as possible. The sooner you submit a file, the sooner you will get your tax refund (you can estimate the total hereAnd each missing stimulus money you claimed upon your return. You also get a chance set up direct deposit with the IRS, or fix any errors that may be get you your third stimulus check faster

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Angela Lang / CNET

What if you made more money in 2020, but the check is based on your 2019 taxes?

The most recent proposal (PDF) says the following:

Taxpayers who receive an advance in excess of their maximum eligible credit based on 2021 tax return information will not be required to return any amount of the payment to the Treasury. If a taxpayer’s 2021 tax credit exceeds the amount of the advance, taxpayers can claim the difference on their 2021 tax return.

Therefore, if you are eligible for the full $ 1,400 based on your taxes for 2020, but the IRS issued your check based on your 2019 taxes, you could claim the difference a year from now on your 2021 tax return – just like the current one Refund Discount in front of missing stimulus check money from the first two rounds.

On the other hand, it also means that if you qualify for the full incentive payment based on your 2019 taxes, but don’t qualify based on your 2020 taxes, and if the IRS has used your 2019 return, you do not have to pay IRS back for that discrepancy.

What happens if your third stimulus check does not arrive or if money is missing?

Once a final bill is approved, if you qualify for a third stimulus check, but yours never shows up direct deposit paper check or EIP card, you probably have to take one more step to claim that money. This happened to millions of people during the first and second round of payments different reasons, including IRS errors, outdated bank information, or addresses, or non-filers who don’t go the extra mile to get the IRS their information.

As with the first and second check, you can claim all missing money from the third check to you or your family members during tax season The next year, 2022. That is far away. The best thing to do now to make sure your third check arrives on time is to file your tax return as soon as possibleeven if you don’t usually need to submit one.

To learn more, read what we know about a third stimulus check and which we believe qualify This time.


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