Your Second Check Couldn’t Be Taken To Pay Overdue Child Support But Your Tax Refund And Recovery Rebate Credit Can Be
Again, under the bill governing the second stimulus check, your payment couldn’t be taken if you owed money for child support — a shift that’s been widely understood across federal and state agencies.
However, these rules have not necessarily extended to the situation of filing for missing stimulus check money on your 2020 tax return. For certain outstanding debts — including past-due child support and unpaid student loans — the IRS can withhold some or all of your unpaid stimulus payment issued as a Recovery Rebate Credit when you file your taxes. An independent taxpayer advocacy group within the IRS is working with the agency to address this issue.
Here’s everything to know about stimulus checks and child support.
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Some Worry The Money Will Get Reported As Income On 2020 Or 2021 Tax Returns
by John Waggoner, AARP, Updated March 16, 2021
En español | The Internal Revenue Service is sending out millions of checks in the third round of stimulus payments. As people start to spend their money, some wonder: Is my stimulus payment taxable?
The short answer: No. In the somewhat longer words of the IRS: No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 or 2021 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.”
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How Do I File My Taxes If I Didn’t Receive A Notice 1444
… I received one of the stimulus checks in 2020 and one in 2021, do I report both in 2020 taxes or on the years received?
Brittany Benson, senior tax research analyst, The Tax Institute at H& R Block, said even if you dont receive, or didn’t keep a Notice 1444 for a stimulus payment, you should still enter the amount you received in advance payments to accurately calculate your recovery rebate credit. You can use an IRS online account and go to the “tax records” tab to see the amount of EIPs received.
The IRS suggests that you can check your IRS account online for the stimulus amount received, if you misplaced Form 1444 or Form 1444-B.
The IRS only began mailing out Form 1444-B for the second stimulus payments the first week of February. So there’s a shot that form will show up in the mail soon. Don’t throw it out.
Susan Tompor
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Stimulus Check Third Round
The IRS also issued a third stimulus payment via the American Rescue Plan Act. This government stimulus check is valued up to $1,400 per eligible adult and qualifying dependent.
Basically, any family member who is a U.S. citizen or resident alien with a Social Security number can qualify.
To be eligible for the third round check, or portion there-of based on phase-out limitations, the maximum income limit is as follows:
- Single â adjusted gross income up to $80,000 with a phase-out at $75,000
- Head of Household â adjusted gross income up to $120,000 with a phase-out at $112,500
- â adjusted gross income up to $160,000 with a phase-out at $150,000
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I Want To Know If I Had Zero Income In 2020 Do I Need To File To Get My Stimulus Check
For the first and second stimulus checks the IRS was using Americans’ most recent tax returns available to calculate whether they would get an economic impact payment and how much during 2020 those would be 2018 or 2019.
Submitting a 2020 return, even if you had no income, would make it possible to claim a stimulus payment because the money was an advance on a tax credit. By filing a return and showing you were eligible for the credit but didn’t receive it, you can claim the stimulus.
… How to file for 2020 when I had absolutely no income, other than a stimulus checks?
It is still recommended that you file taxes to keep a record of you financial situation for the year and possible upcoming stimulus payments.
Stimulus payments could also indirectly affect what you pay in state income taxes in some states where federal tax is deductible against state taxable income, according to The New York Times.
Josh Rivera
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Myth: The $1400 Stimulus Is Based On Your 2019 Salary
The facts: The IRS is basing the size of your stimulus check on the information provided in your 2019 tax return or your 2020 one if you’ve already filed this season.
The data point it’s using is adjusted gross income, or AGI. AGI isn’t your salary. It’s your wages plus capital gains and such, minus expenses like student loan interest and retirement contributions. If you’re curious, you can use a calculator to determine your AGI.
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What Can I Do If I Have Not Received My Eip Money By Those Deadlines
If you have not received all or some portion of your Economic Impact Payments by the deadlines above, you will have to file a 2020 tax return and claim these amounts. You claim them on line 30 of the 2020 Form 1040 as a “Recovery Rebate Credit“. This is another name for the EIP stimulus payments. If you did not get all or a portion of the EIP payments in advance, then you can claim them on line 30 of your tax return for 2020.
Myth: If You Got Your Previous Stimulus Payments Via Debit Card The Irs Will Just Reload It This Time
The facts: Like with the first two stimulus checks, the fastest way to get your stimulus check is to have direct deposit information on file with the IRS. Otherwise, the agency will have to mail you a paper check or prepaid debit card containing your funds.
It won’t, however, top up those old debit cards with your new $1,400. The law prohibits that. So there’s no need to panic if you’ve already thrown away the original debit card.
Also Check: When Will People On Social Security Get Their Stimulus
Here’s What You Need To Know If You’re Worried About Losing That Money
COVID-19 has been wreaking havoc on the U.S. economy for weeks now, and millions of Americans have lost their jobs as a result. Thankfully, there’s some relief to be found in the form of stimulus payments that should already be hitting some people’s bank accounts.
To be eligible for a full $1,200 stimulus payment, you must have an income that doesn’t exceed $75,000 as a single tax filer or $150,000 as a married couple filing jointly. From there, the payment starts to phase out so that higher earners — singles earning $99,000 or more and joint filers earning $198,000 or more — don’t get anything.
But assuming you are eligible for a stimulus check, you might already be making plans for that money. Maybe you’ll use it to pay for essentials, like groceries and medications. Maybe you’ll use it to cover your rent or mortgage payment. Or maybe you’ll pad your emergency fund with it so you’re protected in case the economy gets worse and your job becomes compromised.
Regardless, the last thing you want to risk is losing some or all of that money at a time when you might really need it. But what if you owe the IRS money on your taxes? Can the IRS garnish your stimulus payment?
State Income Taxes On Unemployment Compensation
You may also need to pay state income taxes on your unemployment benefits. This is another tricky area because each state has different rules. Some states dont have a state-level income tax, and others dont tax unemployment benefits. Some tax unemployment benefits in full, and others impose taxes on only a portion of benefits.
If you live in one of the eight states that doesnt have a state income tax , you dont have to worry about paying state income taxes on your benefits. New Hampshire residents are also in the clear because the state only taxes interest and dividend income.
California, New Jersey, Pennsylvania, and Virginia dont tax unemployment benefits, so residents in those states dont have to worry about state-level withholding, either.
If you live in one of the other 37 states or the District of Columbia, check with your tax advisor or your states tax agency to find out how unemployment benefits are taxed. Those states should allow you to set up state withholding online when you apply for unemployment or at any point while you are receiving benefits.
Also Check: 2nd Stimulus Check Release Date
California Adjusted Gross Income
You must have $1 to $75,000 of California AGI to qualify for GSS II. Only certain income is included in your CA AGI . If you have income that’s on this list, you may meet the CA AGI qualification. To receive GSS II and calculate your CA AGI, you need to file a complete 2020 tax return by October 15, 2021. Visit Ways to file, including free options, for more information.
Income included in CA AGI
Generally, these are included in your CA AGI:
- Wages and self-employment income
- Gains on a sale of property
Visit Income types for a list of the common types of income.
Income excluded from CA AGI
Generally, these are not included in your CA AGI:
- Social Security
- Supplemental Security Income /State Supplementary Payment and Cash Assistance Program for Immigrants
- State Disability Insurance and VA disability benefits
- Unemployment income
You would generally not qualify for GSS II if these were your only sources of income. However, if you have income that is included in CA AGI in addition to this list, you may qualify for GSS II.
For information about specific situations, refer to federal Form 1040 and 1040-SR Instructions and California 2020 Instructions for Form 540. Go to Line 17 of Form 540 for CA AGI.
If you receive Social Security
You may be wondering whether or not you qualify for GSS II if you receive Social Security income. Social Security income is not included in CA AGI. However, if you have $1 or more of CA AGI , you may qualify for GSS II.
Your Stimulus Payments Won’t Be Taxed But There Is One Exception
The IRS doesn’t consider stimulus payments to be income, which means you won’t be taxed on your stimulus money. That also means a direct payment you get this year won’t reduce your tax refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won’t have to repay part of your stimulus check if you qualify for a lower amount in 2021. If you didn’t receive everything you were owed this year, you can claim your full stimulus check amount as a Recovery Rebate Credit on your 2020 federal income tax return when you file this month .
However, another big caveat here: If you are filing for any missing stimulus money as a Recovery Rebate Credit on your tax return this year, the IRS can potentially garnish that money to pay for any back taxes you owe. Again, an independent taxpayer advocacy group within the IRS is working with the agency to address this issue to protect those funds for vulnerable taxpayers.
Is the stimulus money really yours? That depends.
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Why Have I Not Received My Stimulus Check
Donât panic if you have not received any or all of your stimulus checks. If your bank account information changed and the direct deposit is not successful, the IRS will mail your relief check to the address they have on file.
If your mailing address or bank information has changed, you can do one of the following:
- Update your address and bank information when you file your 2020 federal tax return.
- Use the IRS Get My Payment tool to provide your banking information. This is an easy way to track your stimulus check.
- You can also notify the IRS by phone, a written statement, or an IRS form.
Itâs also possible you received the economic impact payment and didnât realize it. Some people threw out their payments not realizing what they were.
This Covid relief payment was sent in the form of an EIP card that required activation through the mail. In many cases the recipients ignored it thinking it was spam. The IRS is now sending letters out to those who have not activated their cards.
Itâs important to keep track of these first two checks because they might need to be included on your 2020 tax return. The good news is that they do not have to be reported as income.
If you didnât receive any or all of your checks, remember you can claim them on your return with the Recovery Rebate Credit and you can reclaim the money you did not receive.
Economic Impact Payments Under The Cares Act:
The Economic Impact Payment under the CARES Act can be offset through TOP only to collect delinquent child support obligations that have been referred by the state to TOP.
Your entire Economic Impact Payment authorized by the CARES Act can be offset, up to the amount of your child support debt.
If you are receiving your Economic Impact Payment authorized by the CARES Act jointly with your spouse and only your spouse owes the child support debt, you can file an injured spouse form with the IRS. Please visit the IRS website at to file your claim.
If you have questions regarding whether you owe a child support debt that has been referred to TOP, you can call the TOP Interactive Voice Response system at .
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What If I Never Received A Stimulus Payment
If you didn’t receive the full payment you were entitled to, then it’s possible that when you are filing your 2020 tax return you may end up getting more money, says Eric Bronnenkant, head of tax at financial services firm Betterment.
If your economic situation changed let’s say you qualified based on 2018 or 2019 income because it was lower, but your economic situation improved for 2020 the IRS actually can’t ask for any of that money back, Bronnenkant adds. Your situation can’t get worse in that scenario.
Taxpayers will need to file a 2020 federal income tax return to claim the Recovery Rebate Credit if they didn’t get their Economic Impact Payments or they received less money than they’re eligible to get, such as if a child’s credit wasn’t included in the payout.
The Recovery Rebate Credit is listed on Line 30 of the 1040 Form for the 2020 tax year.
Aimee Picchi and Susan Tompor
Follow Aimee on Twitter and Susan .
I Got A Stimulus Payment For Someone Who Has Died What Should I Do
Someone who has died after Jan. 1, 2021 may be issued a check. If you receive that payment by check and you are the spouse or guardian of the deceased person, you can keep it.
If you cant deposit or cash the check because it was made out to your deceased spouse, you can return it to the IRS. You should include a letter requesting the third payment be made in your name only as the surviving spouse. If you got an EIP card for your deceased spouse and cant access the funds, contact Money Network, the card issuer.
Stimulus payments wont be processed for anyone who died prior to Jan. 1, 2021.
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I Filed My Taxes In February But I Wasnt In The First Payment Round Whats Up With That
The way the IRS determines who gets their money when is a mystery to everyone but the IRS. Were not sure why some people got their payments right away, why some people have to wait, and why some people arent getting answers through the Get My Payment tool yet.
If you filed your 2020 taxes, one thing to keep in mind is that the IRS may not have processed your return yet. The IRS is still working through a backlog of 2019 tax returns due to the shutdown during the pandemic last year, along with processing 2020 returns.