![]() However, if you do owe taxes, it’s important to be aware that the new deadline of July 15 is quickly approaching, and it may be wise to use a portion of your stimulus check to cover that bill.Īnother hang-up that many people have with the stimulus checks is how your income is calculated to determine whether or not you qualify for the full stimulus amount. The federal government will not keep your stimulus check or reduce it to cover an unpaid tax bill. If you have unpaid taxes with the federal government, you might be worried about them keeping your stimulus check in order to cover those unpaid bills. ![]() The stimulus check is considered non-taxable income, so receiving it will not increase the amount you owe on your 2020 taxes. While confusing, this verbiage was necessary in order to employee the IRS’s payment distribution system, which was the fastest way to get funds to struggling Americans.Īnother point of confusion for many people is whether or not they will have to pay taxes on the stimulus amount they receive. This means that when you file your 2020 return, the credit will be listed, but it will be listed as already having been paid. But because people need it right now, they’re giving it in advance. But here’s what many people are overlooking: the COVID-19 relief checks are an advance on a new tax credit, one that nobody has ever received before or will receive again, and one that everybody below the income threshold will receive.Įssentially, the government has added this $1,200 tax credit to every adult’s tax refund who falls below the income threshold-an additional $1,200 tax return. Obviously, this terminology can lead you to believe that you’re just getting your tax refund in advance, and you’ll get less later. The reason that there is so much confusion about this is because the relief checks are technically an advance on a tax credit. If you’re looking for a bit more of an explanation to this, and why many are confused on this matter, keep reading. The check is given by the government to all qualifying citizens, with no expectation of repayment. It also won’t be taken out of any tax refund you may be expecting when you file your 2020 return. ![]() No, you will not have to repay your relief check. If you’re looking for a short answer to this question, it’s no. We hope we can answer all your questions in this regard here. But, due to certain wording in the way these checks were distributed, there has been a great deal of confusion over whether these checks really were a free check from the government, or if you’re expected to pay them back down the line. Giving $1,200 to each adult, plus $500 for each dependent child, was a relief to many citizens who are suffering financially in the wake of the COVID-19 pandemic. The stimulus checks sent out as part of the CARES Act were the biggest headliner that came out of the $2 trillion piece of legislation.
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