Stimulus checks due to the COVID-19 pandemic are starting to be sent to people’s checking accounts. That begs the question: Do you need to pay taxes on your stimulus check?
The answer is no. According to Money.com, the stimulus check won’t reduce your 2020 tax refund. The stimulus check is in addition to whatever you would have gotten anyway. Furthermore, it’s not counted as income, so, according to Money.com, the stimulus check “won’t be taxable and it won’t affect your income tax bracket for 2020.”
The New York Times posed a similar question, “Do I have to pay income taxes on the amount of my payment?” The newspaper answered, “No.” In addition, the Times says the payment won’t be garnished to pay for student loan defaults or debt repayment, including to the IRS. That might not apply to those people behind on child support, according to The Times.
Here’s a stimulus check calculator to help you figure out the amount of your check.
Here’s what you need to know:
What Are the Income Qualifications? When Will You Get the Check?
When will you get a check?
The IRS tweeted on April 11, 2020 that it had started sending out checks already. “#IRS deposited the first Economic Impact Payments into taxpayers’ bank accounts today. We know many people are anxious to get their payments; we’ll continue issuing them as fast as we can,” the IRS wrote in a tweet.
The IRS website now says:
“Do not call
Most people won’t need to take any action
Check back often for updates.”
Learn more about eligibility here.
“The IRS is committed to helping you get your Economic Impact Payment as soon as possible. The payments, also referred to by some as stimulus payments, are automatic for most taxpayers. No further action is needed by taxpayers who filed tax returns in 2018 and 2019 and most seniors and retirees,” the IRS says.
However, CNN reported that the earlier checks will likely apply to people for whom the IRS already has direct deposit information on hand. It could take as long as 20 weeks for other people, according to CNN. CNN also reported that social security recipients who already get their social security benefits directly deposited to their bank accounts will get the stimulus check the same way. Other people will be mailed the check.
Who is eligible for COVID-19 stimulus checks? The IRS explains:
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Typically, the IRS is using your 2019 or 2018 tax form to decide whether you get the stimulus check (2018 if you haven’t filed 2019 yet).
On March 30, 2020, the IRS announced, “The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.”
What if the IRS doesn’t have your direct deposit information? “In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail,” the IRS says.
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