Stimulus checks and your taxes: What to know when you file your 2020 tax return
Whether you get a stimulus check or not relies heavily on your taxes, even if you don't file at all. With tax season 2020 in full swing, here's what you need to know.
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Clifford is a managing editor at CNET, where he leads How-To coverage. He spent a handful of years at Peachpit Press, editing books on everything from the first iPhone to Python. He also worked at a handful of now-dead computer magazines, including MacWEEK and MacUser. Unrelated, he roots for the Oakland A's.
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There are people who do look forward to tax season each year -- those expecting a refund, for example. This year, however, you've got several good reasons to fie your federal tax returns as soon as possible. Aside from the possible refund, your federal tax returns are linked to recovering your first two stimulus payments if you never received them. Even better, a third stimulus check is also tied to your taxes this year. Even if you're a nonfiler, someone who doesn't file taxes, this is the case for you, too.
How could my 2020 taxes affect the amount of a third stimulus check I could get?
The amount of your third stimulus check is based on your 2019 or 2020 taxes, whichever the IRS has on file at the time it determines your payment. If your situation changed dramatically between the two years, you could potentially get the full amount, even if the IRS bases the check it sends on your 2019 taxes. You may need to wait till 2022, however, to claim the difference on next year's taxes. Here's everything to know about how tax season could affect your third check.
The timeline for sending the third stimulus check is merging with tax season -- April 15 is the tax-filing due date -- which complicates matters quite a bit, especially since the IRS is already combining makeup stimulus money with your tax refund this year (more below).
I'm missing money from the first two stimulus checks. How can I file for a Recovery Rebate Credit?
Filing for a tax extension won't postpone your having to pay taxes you may owe. Those will still be due by April 15; otherwise, you accrue interest on the amount, which you'll eventually have to pay on top of your income taxes. And you of course are delaying receiving your stimulus payment.
If I file my taxes now, will it speed up or slow down my third stimulus payment?
That depends. Since the IRS is now sending out the third stimulus payment, one potential way to receive it soon is to sign up for direct deposit with the IRS, if you haven't already. There is no guarantee, however, that the IRS will receive your banking information in time to use it for your payment.
What if I'm a nonfiler and don't usually file tax returns?
I didn't file my taxes in 2019. Can I still get a stimulus check?
If you weren't required 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 qualify for a payment. Up to 9 million people who fell into this nonfilers category were owed a first stimulus payment as of last fall.
How are taxes, stimulus checks and dependents tied together?
For the second check, you could receive up to a $600 payment for each dependent under age 17 whom you claim on your taxes. The definition was narrower than for dependents who'd be eligible for certain credits under tax law, including children 17 and older, dependents of any age with disabilities and older adult relatives.
Am I still eligible for a stimulus payment if I lost my job or got a new one since I filed my taxes last year?
If your financial situation changed after you filed your 2019 tax return -- for example, if you received less income -- you can claim that additional amount on your 2020 tax return when you file this year.
Will the overall stimulus payment amount I received affect how much I'll 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 doesn't count as income for purposes of determining if you're eligible for federal government assistance or benefit programs.
Could my 2019 tax returns help get my missing stimulus payment any quicker?
"If you are an eligible individual who has not yet received your full EIP and you have certain outstanding debts, some or all of your unpaid stimulus payment will be withheld to offset those debts," the Taxpayer Advocate Service said in a blog post. The IRS is looking into this issue.
For more, here's everything you need to know about stimulus checks.