Most taxpayers in the United States will be receiving (or have already received) a check or direct deposit of up to $1,200 as part of the stimulus bill passed by Congress to assist people during the COVID-19 pandemic. This is a very unusual circumstance, which has left people to wonder how their stimulus check will affect their taxes in Hayward, CA for 2020.
If you qualify, the amount of money you receive will be based on your 2019 tax return (or your 2018 tax return, if you haven’t yet filed your 2019 taxes). You will also receive $500 for each dependent child you can claim under the age of 17.
Here are a few of the questions people have most commonly asked us about how the stimulus check will impact their taxes.
Will my 2020 tax refund be reduced if I accept the stimulus money?
No. There has been a lot of misunderstanding and miscommunication surrounding this issue, as the word “advance” has been used in some descriptions of the stimulus money. The word “advance” does not refer to you getting an “advance” on your tax refund for next year (and thus having next year’s refund reduced), but instead refers to a special tax credit that will appear on your taxes next year.
Simply put, the stimulus money you receive is an add-on to what you can expect to receive next year, not an advance on the money you’ll be owed. You will not have to pay it back in any sense.
Will I need to claim the stimulus money as income on my taxes next year?
No. Another one of the benefits of the stimulus money is that not only does it not count against your refund, but you also do not need to claim it as income. The stimulus money is not taxable, and as such will not affect your income tax bracket.
Will I still get stimulus money if I don’t file income taxes?
Yes. If you receive Social Security benefits, the IRS will use the information you provided on your SSA-1099 tax form to get you your money via check or direct deposit. Whatever method you use to receive your Social Security benefits will be the same method used to deliver your stimulus money. People who receive Social Security or disability benefits will need to take additional steps to get money if they have any dependents and want to receive the $500 credit for them.
If you do not file taxes or get any type of Social Security benefits, you need to get in touch with the Internal Revenue Service. The agency’s website has an online form that non-filers should fill out to get their stimulus money. TurboTax has also developed a portal to allow non-filers to submit their information to the IRS so they can get the money they’re owed.
These are just a few examples of some of the most common questions we’ve been fielding regarding the stimulus money. For more information about the impact your stimulus check can have on your taxes and your overall financial situation in Hayward, CA, contact Menjivar & Company CPAs, Inc. today.
Categorised in: Tax Return