Friday, September 15, 2023

Stimulus Check If You Owe Taxes

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Are There Ways Someone Can Get Their Economic Impact Payment Faster

Coronavirus stimulus checks: Answering your questions | KVUE

No, as long as they have direct deposit. Beware of scams! Some people are spreading information through phone calls, emails, text messages, and social media posts suggesting that people can get their payment quicker by sharing personal information and paying a processing fee. It is unnecessary to spend money to get this payment. The IRS will not contact anyone through these platforms. They will send written correspondence with instructions on steps to take and the timeframe for action. The IRS will never ask someone to share personal information especially banking details in a non-secure method.

Additionally, the IRS refers to this money as an Economic Impact Payment. Communications that use stimulus check or recovery rebate are unlikely to be from the IRS. Encourage people to hang up on phone calls they receive and delete email or text messages that have any of these characteristics of a scam. One can report scams to the Better Business Bureau which helps protect others.

Are Recovery Rebate Credit Garnishments Unfair

Because of the tax-law change made in December, “the rug is being pulled out from under eligible individuals with outstanding debts,” said Erin Collins, National Taxpayer Advocate, in a January 28 blog post. “Since the spring, the IRS reassured these taxpayers that if they claim the when they file their 2020 returns, they will get the full amount of stimulus money they are eligible for and be made whole. Now that reassurance turns out to be inaccurate based upon the law change.”

Here’s the situation, according to Collins:

  • People with certain outstanding debts who received the full amount of their stimulus checks didn’t have their payments subject to garnishment , but
  • People with similar outstanding debts who didn’t receive the full amount of their stimulus checks will receive a reduced Recovery Rebate credit or nothing at all when they claim it on their 2020 tax return.

“This disparate result undermines public confidence in the fairness of the tax system,” said Collins. “Financially struggling taxpayers who were entitled to receive the full amount of the last year but did not have effectively been harmed once. It is unfair to harm some of these taxpayers a second time by seizing some, or all, of their stimulus payments.”

How Much Will I Get

Normally, you get money from any tax credits when you file your tax return in April. Because of the COVID-19 emergency, the government wants you to be able to use the money now when you need it and they donât want you to wait until next April to receive it.

So they made this a tax credit that you can get immediately, as long as your income is below the qualifying threshold:

  • People earning an income of $75,000 and under will receive a stimulus payment of $1,200 for individuals (or $2,400 for married couples

  • People earning more than $75,000 but less than $99,000 will get a reduced stimulus payment.

  • People who receive the stimulus payment will also receive up to $500 per qualifying child

Because we donât know what our 2020 income will be yet, the IRS is using our 2019 or 2018 tax return to determine who gets the credit and how much they receive.

But donât worry: the IRS is not going to ask for the money back once you file your 2020 taxes. If you automatically receive a stimulus payment based on your 2019 income that is more than what youâd receive if it was calculated using your 2020 income, you wonât have to repay the government .

Recommended Reading: New Stimulus Package Student Loans

Who Is Eligible For A Stimulus Payment

The eligible people who have received the payments earlier did not have to do anything more to be able to receive the third payment. In general, if someone met the following criteria, they were eligible for the entire sum of the third Economic Impact Payment stated by the IRS:

  • U.S. citizen or resident alien
  • If you are not dependent on a taxpaying citizen
  • If you have adjusted gross income or the AGI which is not over:
  • $150,000 if you are married and are filing a joint return or if you are filing as a qualifying widow or widower
  • $112,500 if you are filing as the head of the family or
  • $75,000 in case you have any other filing status

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Stimulus Check And Taxes Owed

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Don’t Miss: Who Is Not Eligible For Stimulus Check

I Get Ssi Should I Spend The Stimulus Money Within A Year What Can I Spend It On

Spend down your CARES Act EIP money before 12 months have passed since receiving the payment. You are not limited in what you can spend the money on. You can spend down on whatever you wish, including on gifts and charitable contributions. If you don’t spend it within 12 months, the Social Security Administration will count the money as a resource.

Is There A Deadline To Get The Economic Impact Payment

The IRS must receive peoples information by November 21, 2020 to issue payments this year. For many people, this means completing an online form. See question 7 on how to get payments for more information.

If someone is required to file a tax return AND owes taxes, they must file and pay the amount owed by July 15 to avoid late fees. If more time is needed to file taxes, a person can get an extension until October 15, 2020, but they will need to pay the tax owed by July 15 to avoid penalties.

If people receive Social Security, Social Security Disability Insurance , or Supplemental Security Insurance OR are a railroad retiree or Veterans Affairs beneficiary, they must send information to the IRS to get their additional stimulus payment for qualifying children this year. They should use the IRS Non-filer tool to add the names and Social Security Numbers for their dependents. Learn more about qualifying dependents here.

If they miss these deadlines, they will be able to get their payment in 2021 by filing a 2020 tax return.

Read Also: How Do I Get The $600 Stimulus Check

Yes Your Third Check Might Be Seized To Pay Certain Debts Here’s Why

Under the bill governing the second stimulus check, your funds could not be garnished to pay debts like child support, banks or private creditors. However, part of this rule changed with the third check.

The bill authorizing the third payout was pushed through using a process called budget reconciliation. Congressional Democrats used this legislative tool to more quickly pass the new COVID-19 relief bill and the third stimulus check that comes with it, since it allowed them to pass it with fewer votes. But because this process was used, the third checks aren’t protected from all garnishment, although lawmakers are moving to fix this now.

There are three types of unpaid debt that could be paid through garnishment: unpaid IRS tax debt, other government debt like child support payments or private debt, according to Garrett Watson, a senior policy analyst at the Tax Foundation. Your third stimulus payment will be protected from outstanding tax debt and child support, but not from private debts, such as debt accrued due to a civil judgment, ranging from civil damages to consumer debt in default, Watson said.

Several banking groups sent a letter to Congress on March 9 asking lawmakers to pass stand-alone legislation to prevent the third check from being garnished for private debts.

What Is The Stimulus Check

Tax time: Will I owe money because of the stimulus checks?

As part of the $2.2 trillion CARES Act, the federal government will issue payments – by check or direct deposit – to millions of income-qualified Americans. This is what we mean by “stimulus check.” The purpose of the payments is to help people cover basic necessities at a time when many have been told to stay home and have lost income.

Read Also: When Can Social Security Recipients Expect The Third Stimulus Check

When Do The Stimulus Payments Stop

Above specific AGI levels, payments were phased out â or reduced. This means that those who have an AGI of at least:

  • $160,000 if married and submitting a combined return or in case you are filing as a qualifying widow or widower,
  • or $120,000 if filing as the head of the family
  • $160,000 if married and submitting a combined return

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.

Don’t Miss: Where Are The Stimulus Checks Coming From

Do I Get A Irs Stimulus Check If I Owe Taxes

The answer is yes. You will still get a stimulus check if you owe taxes. The IRS will not offset any unpaid taxes against the stimulus provided by the government.

The IRS states there is just one reason why an eligible taxpayer may not receive their stimulus check: owed child support.

If you need to pay child support and the deadline has elapsed, the Bureau of Fiscal Service will let you know. The amount of past-due child support will be taken off the stimulus check.

The IRS will determine whether you are eligible to receive a stimulus payment when you file your 2019 or 2020 taxes.

Finally, if you receive a stimulus payment based on the income stated on your 2019 tax return, but your 2020 income is higher, which would ordinarily impact your eligibility, you will not be required to give it back in 2021.

What About People With Itins

Answered: If I Owe Child Support, Will I Get a Stimulus Check ...

You still need a work-authorizing Social Security Number to be eligible for this stimulus. However, there are important changes since the first round of stimulus checks.

  • In the first stimulus rollout, any non-SSN holder on a joint return made everyone on that return ineligible. Big change: The new rounds of stimulus has corrected this problem. If you filed a joint return with a non-SSN holder, you are still eligible for the stimulus. See the below hypotheticals.
  • Situation: A single tax filer has an Individual Taxpayer Identification Number but no Social Security number .
  • This person is ineligible for the stimulus.
  • Situation: A spouse has a Social Security number and files married filing jointly on a tax return with a spouse who has an ITIN.
  • The SSN holder is now eligible to get a payment. If they have children on the tax return that have SSNs, these children will be eligible for the payment for each qualifying child.
  • Situation: Two ITIN holders file a joint return and claim young children who have SSNs.
  • The children who have SSNs are eligible for the payment.
  • Read Also: Irs Tax Third Stimulus Checks Update

    Do I Have To Pay Taxes On My Stimulus Check

    The answer is no. The Government coronavirus stimulus checks do not count as taxable income. It will have no impact on the size of your tax refund or how much you owe in taxes when you file your tax return in 2021

    The stimulus payment counts as a type of refundable tax credit. This means even if you do not ordinarily owe anything in Federal taxes you will still receive your money.

    Stimulus Checks Vs Recovery Rebate Credits

    Stimulus checks are actually just advance payments of the Recovery Rebate tax credit. As a result, when you calculate the credit amount on your 2020 tax return, you’ll have to subtract the combined total of your first- and second-round stimulus checks . If you still have a credit left after subtracting out these stimulus payments, it will lower your tax bill, trigger a tax refund, or make your refund bigger. If the amount of your stimulus checks equal or exceed the amount of the credit, you don’t have to repay the difference.

    The amount of each stimulus check and the amount of your Recovery Rebate credit are generally calculated in the same way. However, the IRS relies on different sources of information to determine the amount of each that’s one of the reasons why the two amounts could be different. For first- and second-round stimulus checks, the IRS mainly looked at your 2019 tax return. If you didn’t file a 2019 return, they looked for a 2018 return to calculate first-round payments. If you didn’t file a 2018 or 2019 return, the IRS may have gotten the information it needed from a special online portal for non-filers or from a government agency that pays you benefits, such as the Social Security Administration or Department of Veterans Affairs.

    Recommended Reading: When We Get Stimulus Check

    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 didnt 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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    First And Second Stimulus Check

    Yes, if you’re owed stimulus money, you can get it through filing taxes

    You will need to file a tax return for Tax Year 2020 . The deadline to file your taxes this year was May 17, 2021. The tax filing extension deadline is October 15, 2021.

    If you missed the filing deadline, you can still file your tax return to get your first and second stimulus checks. If you dont owe taxes, there is no penalty for filing late. If you owe taxes, you may be subject to penalties and fines for not filing or not paying taxes. The government may reduce your tax refund to pay for any taxes you owe and other federal and state debts.

    To learn more about your options if you think you owe taxes, read Filing Past Due Tax Returns and What to Do if I Owe Taxes but Cant Pay Them.

    Read Also: Stimulus Checks For Social Security

    An Exception To The Rule

    According to the CARES Act, there was only one thing that could stand between you and your stimulus check: Past-due child support payments. Individuals who owed child support payments had their stimulus money confiscated to pay arrears during the first round of stimulus checks.

    However, if you owed child support payments when the second round of payments was sent, you were still eligible to receive your stimulus payments because of the new laws that were passed.

    Americans Who Didnt Receive Any Stimulus Checks At All

    Many Americans out there just havent received any of their promised stimulus checks. If thats you, you should jump at the opportunity to claim your credit.

    A number of circumstances can cause these delays for you: Perhaps youve moved and the IRS doesnt have your new address on file. Maybe the IRS did have the correct address or bank account information, but it never hit your checking account or perhaps got lost in the mail. All of these would be instances when you should apply to reconcile your payment on your tax return.

    As always, its good practice to go back through your records and find any documents from the IRS showing your designated stimulus amount, if you have them. Then, look back through your deposit statements around the time when both stimulus checks mightve been cashed or deposited .

    The IRSGet My Payment tool will be helpful for tracking both of those checks statuses. That portal should also give you information showing the date of payment and the method , according to the IRS.

    If all of your research validates these suspicions, its time to claim your Recovery Rebate Credit.

    Read Also: When Will People Get Second Stimulus Check

    Stimulus Check Second Round

    The second round of stimulus checks resulted from another economic relief bill that was passed at the end of last year.

    This payment ended up being $600 per person plus $600 per dependent. This payment was issued late December 2020 and January 2021 and was recorded on IRS Notice 1444-B.

    To be eligible for the second 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 $87,000 with a phase-out above $75,000
    • Head of Household â adjusted gross income up to $124,500 with a phase-out above $112,500
    • â adjusted gross income up to $174,000 with a phase-out above $150,000

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