WASHINGTON – The Internal Revenue Service essentially sends out stimulus checks after completing a first round in spring and summer and a second round in December and January. But there are still billions of dollars some households can claim – through their 2020 tax returns.
No. The first round was $ 1,200 per adult and $ 500 per child and the second was $ 600 per adult and $ 600 per child. Whoever received all of the money doesn’t have to do anything. And the stimulus payments are not taxable income.
Who could get more money?
There are several categories of people who may not have received full stimulus payments. Since payments were based on 2018 or 2019 income and household size, some individuals may be eligible based on their 2020 status – even if they were not eligible for an advance payment.
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That can happen when income changes. Payments will expire when income reaches $ 75,000 for individuals and $ 150,000 for married couples. A single person who earned $ 125,000 in 2018 and 2019 and $ 70,000 in 2020 would not have received any payments but could claim both stimulus payments on their 2020 tax return totaling $ 1,800.
Some people in the income exit zone may have received partial payments and can receive more if their income falls for 2020.
What if I had a baby in 2020?
People who had babies in 2020 can also request payments for their child in their tax return. In general, they would not have received any payments in 2020 because the IRS did not have any information about the baby from the 2019 tax return, but they can now receive $ 1,100 per child in addition to other parenting tax benefits.
How about students who are no longer dependent?
In addition, people who were dependent on someone else’s returns but are no longer dependent can now receive payments. This may be the case for college students who may have returned from their parents in 2019 but then start living independently from 2020.
Anyone who is still dependent on adults – including some elderly and disabled people – is not eligible for either payment round and cannot claim the money for tax returns.
What’s the story of mixed status families?
So-called mixed status families are those where some people have social security numbers but others do not. The family members with social security numbers were not eligible for the first payment but were challenged for both payments in the December Act. You can match all of this on your 2020 tax return to claim what you haven’t received yet.
What about others who didn’t get any money?
Other eligible people may have just slipped through the cracks and received no payment at all. They can file a tax return to get the full amount and the Biden administration is asking the finance department to offer this group more ways to access the money.
“Can we do better? For sure. There are some lessons in each of them, “IRS Commissioner Charles Rettig said this month.
How do I get my money?
Typically, you’ll need to file a 2020 tax return – although you typically don’t earn enough income to file one. No line for stimulus checks is displayed on return. Instead, look on line 30 of Form 1040 and Form 1040-SR for an item labeled “Recovery Discount Credit”. This credit is the difference between the stimulus payments owed and the stimulus payments received.
The credit then increases any refund you would otherwise have received or decreases the amount of income tax you owe.
When do I get this money?
Tax preparation firms are currently working on tax returns, as are companies working with IRS Free File, a program that allows federal tax returns to be filed for free for low and middle income households.
However, due in part to the computer programming required to handle the stimulus payments and other late changes in tax law, the IRS won’t accept tax returns until February 12th. Refunds typically take up to 21 days, and the IRS expects this to be a large portion of the refund payments in early March.
The IRS will go much faster for taxpayers filing electronically and providing direct deposit information.
What if i have too much money?
This can happen if your income qualified you for a payment in 2018 or 2019 but was too high to qualify in 2020. In almost all cases, you don’t have to do anything. You can keep the money and it is not taxable.
What if my check is lost or stolen? Or what if I received a letter informing me of a payment but not receiving the money?
Visit the IRS website for more information.
What about the extra payments that President Biden is talking about?
President Biden requested payments of $ 1,400 per person, which would increase the $ 600 payments approved in December to $ 2,000. It is up to Congress to approve Mr Biden’s plan, and the legislature has not.
If Congress approves additional payments, eligibility, income limits, and exit options may differ from the first two rounds.
Write to Richard Rubin at [email protected]
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