You might have some questions about the second federal stimulus check.
Do I qualify for a stimulus check? When will I get a stimulus check? How much will my stimulus check be? What if I don’t have direct deposit set up?
We have some answers. Please note that we are not accountants, and we’re just sharing publicly available information. Please consult a tax professional if you have any questions or concerns. We are not able to answer any additional questions on the stimulus checks.
To clarify, though, the stimulus payment is not taxable income. You will not owe taxes on this money. Also, a stimulus check is separate from your tax refund. If you’re due a tax refund, you will still get that if you file your return.
We found this article from Kiplinger simple and easy to understand.
Who Will Get a Stimulus Check and How Much?
Not everyone will get a payment through the stimulus package, although many will. You can be eligible for a stimulus payment whether you’re employed full time, part time, self-employed, unemployed or retired.
You must have a Social Security number. You cannot be claimed as a dependent on someone else’s tax return.
The payment this time is $600 a person, half of the amount of the first stimulus check. The amount of the check, however, will be phased out, and gradually reduced to zero, if you’re single, married filing a separate tax return, or a qualifying widow(er) with a 2019 adjusted gross income (AGI) above $75,000.
The amount of the check will be phased out, and gradually reduced to zero, if you’re married (or a surviving spouse) and file a joint tax return, and your AGI exceeds $150,000.
If you claim the head-of-household filing status on your tax return, your payment will be reduced if your AGI tops $112,500.
Parents will also get $600 for each child who qualifies for the child tax credit (they must be 16 years old or younger.)
The IRS will get all this information from your 2019 tax return.
Kiplinger has a handy second stimulus check calculator you can use to help you figure out how much you may get from your stimulus check.
How and When Do Stimulus Checks Arrive?
The checks will start going out during the last week of December, 2020. If the IRS has your bank account information already, from a tax payment or tax refund, you should get your stimulus check pretty quickly. Otherwise, well, “the check’s in the mail.”
What’s the Recovery Rebate Credit?
The two stimulus checks are actually advances on the Recovery Rebate Credit. According to the IRS, eligible individuals can claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. These forms can also be used by people who are not normally required to file tax returns but are eligible for the credit.
If you’re eligible, and did not receive the stimulus checks, or you didn’t receive the full amount, you should be able to claim all or part of the Recovery Rebate Credit when you do your 2020 tax return.
Basically, the stimulus checks are based on your 2019 tax return, whereas the Recovery Rebate Credit is based on your 2020 tax return information.
One example: if you were claimed as someone’s dependent in 2019, you weren’t eligible to receive a stimulus check. But if you were not claimed as a dependent in 2020, you should be eligible for the Recovery Rebate Credit.
If you did receive one or more stimulus check in 2020, then you would deduct the amount of those checks from the Recovery Rebate Credit when you do your 2020 tax return.
Just as with the stimulus checks, the Recovery Rebate Credit gets phased out if your AGI exceeds certain amounts.
Read the official information from the IRS about the Recovery Rebate Credit, and please consult a tax professional with any questions.
Beware of Stimulus Package Scams
Any situation can bring about a scam, so beware of suspicious communication from anyone claiming to be involved with processing stimulus checks.
The federal government will not call or email you or reach out via social media. Any outreach like this is likely a scam, so don’t reply, share any personal information or send money.Subscribe to Charlotte on the Cheap