Next stimulus check and taxes: What to know about kids, your income and Tax Season 2020 – CNET

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Taxes and stimulus checks go hand in hand. We’ll show you how.


Angela Lang/CNET

Just as they did if you received the first economic stimulus check, your federal tax returns will determine if you’re eligible for a second stimulus check and how much of the $600 relief payment you and your qualifying dependents will receive. (Here’s how to calculate the size of your second check.) Congress has closely linked your taxes and the new $600 stimulus payments. Not only do your tax returns determine if you qualify for a check but you can claim stimulus money the IRS owes you from the first and second payments when you file your taxes this year.

And there’s more. How do dependents you claim figure in? Does the payment count as taxable income when you file? And what happens if you aren’t normally required to file a federal tax return?

We can help answer your questions about how tax returns and stimulus checks go together. For more information, here’s how to track your stimulus check online and in the mail. Here are other important stimulus check facts to know.

How do my tax returns determine the size of my second stimulus check?

The IRS uses the adjusted gross income, or AGI, from your 2019 federal tax return to calculate how much of the $600 payment you and any qualifying member of your family will receive. Your AGI may be a different figure from your annual salary or take-home pay based on a variety of factors. 

What’s a Recovery Rebate Credit?

The IRS is rushing to make payments by Jan. 15, the cutoff date Congress set for the agency to finish sending the second stimulus money to bank accounts and in the mail.

If you don’t receive your payment by the middle of the month, however, you can still claim it when you file your federal tax returns this year as a Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR. You can also claim any money the IRS owes you from the first stimulus checks.

To help you work out if you are missing a payment and for how much, the IRS will provide a Recovery Rebate Credit Worksheet. You’ll need the IRS’ calculated amount from the letter the agency will send you called Notice 1444 for the first payment and Notice 1444-B for the second payment.


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Second stimulus checks: Everything you need to know

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Will I pay taxes on my stimulus payment?

No, a stimulus payment does not count as income and you won’t owe tax on it, the IRS has said

I didn’t pay taxes in 2019. Do I still qualify for a payment?

If you were not required to file a 2019 tax return because you were below income limits or you receive federal benefits such as Social Security, you could still qualify for a payment.

Up to 9 million people who fell into this “nonfilers” category were owed a payment as of last fall.

While many people in this category should receive their second payment automatically, if the IRS does not send you money you qualify for by tax season, you will need to file a federal tax return this year to claim your missing payment as a recovery rebate credit, the Tax Foundation said.

What’s the relationship between dependents and taxes?

For the second checks, you could receive up to a $600 payment for each dependent under age 17 you claim on your taxes. The narrow definition excluded others who under tax law may also meet the requirements of a dependent, for both children 17 and older and adult relatives.

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


Angela Lang/CNET

What if I lost my job or got a new one since I filed taxes — do I qualify for a stimulus check?

If your financial situation changed after you filed your 2019 tax return — for example, you received less income — you can claim that additional amount on your 2020 tax return when you file this year.

How would the stimulus payment last year affect how much I owe on this year’s taxes?

If you got a payment last year, it won’t reduce your tax refund or increase what you owe when you file your 2020 tax return this year. The payment also does not count as income to determine if you’re eligible for federal government assistance or benefit programs.

Can my 2019 tax returns help me get a second check quicker?

If the IRS has your direct-deposit information from a previous federal tax return, the agency will attempt to deposit your check in the bank account you provided. If you receive your refund by check in the mail, however, or if the IRS or your bank information is out of date, the agency will send your payment in the mail. The IRS is not accepting direct deposit information for the new check.

Will I have to return the money if I qualify for less with next year’s taxes?

You won’t be required to pay back a stimulus payment if, based on your 2020 tax returns, you no longer qualify for the amount you received.

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If you weren’t required to file a tax return, you can still qualify for a stimulus check.


Angela Lang/CNET

Will the IRS take my stimulus money to cover any payments I owe?

For the second check, if you owe federal taxes or have other federal debts, the IRS will not reduce your stimulus payment to cover those. It will  also not redirect any past-due child support you owe. Debt collectors also can’t garnish your payment.

For more, here’s what you need to know about stimulus checks if you receive SSDI benefits, who else might be eligible for a second stimulus payment and what other benefits are part of the new COVID-relief legislation.

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