IS VIRUS AID MONEY TAXABLE ?
July 12, 2020 - Douglas Myser
Is virus aid money taxable ? We have received many calls from both taxpayers and clients regarding the ongoing virus tax relief money and paycheck protection program. Many of the questions pertain to whether the money is taxable, the implications for filing tax returns, or the IRS tax resolution they are working on. In an attempt to clarify some of those questions, we have been putting out information relevant to those topics, and other useful information provided by both the IRS and other tax sources. Is virus aid money taxable ?
The IRS began depositing coronavirus relief checks lately to some eligible Americans. But many questions about the payments, including how quickly the money would actually flow into citizens hands still abound. We found seven myths about the relief funds that are prevalent, and in an effort to dispel some of those myths, we have put out some information to help clarify these. The funds are taxed. Most people believed the funds were not taxable income.. The checks--which are worth $1200 for individuals earning up to $75,000 and $2400 for couples earning up to $150000, plus $500 for dependents under 17--are structured as refundable tax credits. That is why even people who do not typically file tax returns qualify for these payments, according to the Tax Foundation, an independent think tank.
Myth two, I will have to pay back the money next season. You may even receive more money when you file your 2020 taxes. While the checks are based off of your 2019 or 2018 returns to get you money now, they are technically credits for 2020 taxes, per the Tax Foundation. If it turns out that you should receive a larger credit based on your 2020 adjusted gross income then you will receive the difference next year. "If a taxpayers income drops in 2020, they will be eligible for any remaining rebate credit they were not able to claim using their 2019 or 2018 return", according to the Tax Foundation.
If you have a back tax debt or unfiled tax returns, call our 36 year old Tax Resolution Company. We are known Nationally by Tax Resolution Companies as a trustworthy company. Our Tax Resolution is stress free for out clients, as we know how to navigate the IRS and State Tax Codes. We can determine all options for Tax Relief, including but not limited to the IRS Fresh Start Program. Our efforts can help you avoid a IRS Wage Garnishment or Bank Levy. Call today for a Tax Resolution Services consultation. We are Nationwide and are truly a Service Oriented Company. 1-888-689-7861