Saturday, February 27

Still no stimulus check? What that means for your tax return this year


Getty Images | Andersen Ross

If you haven’t received your $600 stimulus check, there’s good news: You may still be able to claim the money when you file your taxes.

The second $600 stimulus checks authorized by Congress in December included $600 per individual, or $1,200 per married couple filing jointly, plus $600 per child under 17.

Last week, the IRS said it had sent all “legally permitted” stimulus checks and now plans to turn its attention to tax filing season that began on Feb. 12.

To date, more than 147 million second stimulus checks totaling $142 billion have been delivered, the tax agency said.

Individuals and families can claim any missing money through a recovery rebate credit on their tax returns.

It’s not just people who didn’t receive $600 second checks who stand to get more money. It also covers those who did not receive the first $1,200 check for which they were eligible. (This does not include new $1,400 stimulus checks, which are still being negotiated in Congress.)

Now, those individuals and families may be “topped up” for missing funds. Generally, those who received overpayments do not have to pay those sums back.

But you may not automatically get the full $600 or other amount you feel you are owed.

The reason: The recovery rebate credit is part of your overall return, including any tax liabilities.

So if you receive a credit for the $600 stimulus check, but owe $500, you will receive a payment of just $100.

“If you’re going to owe money, you’re still going to owe money,” said Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.

How to claim your recovery rebate credit

Miami Herald | Tribune News Service | Getty Images

If you do receive a recovery rebate credit, that will reduce any other tax liability dollar for dollar, according to Garrett Watson, senior policy analyst at the Tax Foundation.

You could owe money if you under-withheld taxes from your paycheck or unemployment benefits, for example.

“The good news is it does reduce the amount that you otherwise would have owed,” Watson said. “From a net benefit perspective, you are held harmless, but it’s not as liquid as a direct check would have been earlier in the year.”

Because the recovery rebate credit will be calculated from 2020 adjusted gross income, it’s worth checking to see if your payment eligibility changes from the past stimulus payments, which were based on either 2018 or 2019 returns, particularly if your income went down last year.

Generally, individuals who earn up to $75,000 qualify for full payments, as well as heads of households with up to $112,500 in income and married couples with up to $150,000. The payments are gradually reduced and ultimately phased out completely for higher earners.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: