If you haven’t opened your bank account to find the extra stimulus payment, you might be one of the millions still patiently waiting. Still, there’s one lingering question–will stimulus checks be taxed?
Although there have been claims of your stimulus being held against taxes you owe, the IRS hasn’t made any official announcements in regards to this matter.
You might find yourself in limbo not sure of what might happen, but there’s no need to stress out about it. Let’s take a deep dive into a few areas surrounding the stimulus payment and taxes that might help ease your mind.
Is my stimulus check taxable income?
According to the Internal Revenue Services (IRS), any stimulus payment is not counted as taxable income.
Will my stimulus apply towards taxes I owe?
As stated above, the IRS hasn’t made an official announcement in regards to this. Some are speculating that if you haven’t received your relief payment yet and you owe taxes, your stimulus payment might be used toward the taxes you owe.
Your second payment will not be offset for any taxes you owe, payment plans with the IRS, past-due child support, debt collectors, or Federal and State debts.
What if I don’t receive my stimulus payment after January 15th and I don’t owe taxes?
Announced on December 29th, 2020, the IRS began distributing direct deposits of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. Paper checks distribution initiated the day after on December 30th, 2020.
These payments are automatic for eligible taxpayers and there’s no action needed to receive your payment. The official deadline for stimulus payment distribution is January 15th, 2021. This date includes paper checks and EIP debit cards.
The announcement went on to say:
“Eligible individuals who did not receive an Economic Impact Payment this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021. The IRS urges taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.”
In other words, if you’re eligible for the first or second stimulus payment and don’t owe taxes, you should see a tax credit on your tax return.
What if I receive an overpayment?
Stimulus eligibility is based on 2019 taxes, and if you made more in 2020, you’re not required to pay back the overpayment.
If you believe you received more than one EIP payment, it could be a catch-up Economic Impact Payment. If you received more than one EIP payment make sure that it’s not one of the following:
2019 tax refund or interest payment on your tax refund. Confirm this with the refund amount on your Form 1040 or 1040-SR for 2019.
Unemployment compensation – some states are issuing back payments to individuals.
An Economic Impact Payment (EIP) for someone else in your household.
A catch-up EIP for an injured spouse or qualifying child
Will I receive a higher 2020 tax refund?
Whether or not you receive a tax refund and how much is largely dependent on a multitude of factors including UI benefits, child credit tax, earned income tax credit, and decreased income. Reference IRS.gov, local tax professionals, or online tax preparation companies to learn more.
Can I get my tax refund faster?
Looking to prepare your taxes in the comfort, convenience, and safety of your home? It doesn’t matter who you are, how much you earn, or how you earn it, 1040 offers $25 tax filing of Federal and State tax returns for everyone! Easily import your W-2 and experience their “walkthrough technology” backed by a supportive customer service team.
When you have your tax refund directly deposited into a MoneyLion RoarMoney account you could get your refund up to two days early.
Any large purchases you’ve been planning to make with your tax returns come with Price Protection when you use your MoneyLion Debit Mastercard. If you find your eligible purchase at a lower price somewhere else within 90 days, request a refund for the difference — up to $250 per claim (maximum $1000 per year). Now that’s smart shopping!
Get The Cash You Need Now With Instacash From MoneyLion
Paper checks and EIP debit cards could experience some delays even after the January 15th, 2021 deadline. Continue to check the status of your stimulus payment on the IRS website using their ‘Get My Payment’ tool. Need money today?
Download the MoneyLion app and apply for an Instacash cash advance up to $250 at 0% APR. Pay a small fee to kick your funds into turbo delivery and get the money you need instantly!
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