STIMULUS AND 2020 TAXES INTERTWINED

Stimulus and 2020 taxes intertwined. Your taxes have a lot more to do with your stimulus checks than you may think—and that goes for the first and second direct payments as well as a potential third stimulus check. Your federal income tax plays a major role in determining the size of the check the IRS will send you, and if you qualify for a stimulus check at all. The IRS is also using this year’s tax return (for taxes on your 2020 income) to pay you money you should have received but didn’t. So if you don’t get your second round stimulus payment, by the end of next week or a debit card in the mail, you’ll most likely need to claim the payment on your federal taxes this year. With tax filing season set to start in a little less than four weeks, you have time to collect the paperwork you’ll need to claim a payment. Stimulus and 2020 taxes intertwined.

What’s a recovery rebate credit ? The December stimulus bill set a January 15th cutoff for the IRS and U.S. Treasury to send the second stimulus payment to bank accounts and through the mail. Unless the IRS mailed your check right at the deadline or your payment is caught up in a direct deposit holdup with tax preparers, you’ll need to claim money form the $600 stimulus check when you file your federal tax returns this year as a Recovery Rebate Check on the 2020 form 1040 or Form 1040-SR. You can claim money the IRS owes you from the first round of stimulus checks, authorized last spring—millions are owed a catch up payment for child dependents. According to the IRS, you’ll be able to claim your missing payment on your taxes in about a month, with any payments going out after. The IRS said you can start preparing your taxes now–through its Free File tax preparation service if you qualify to use it–or through a tax preparation service.