There are people who look forward to the tax season every year – those who wait for a refund, for example. This year, however, you have several good reasons to file your federal tax returns as soon as possible. In addition to the possible refund, your federal tax returns are tied to recovering your first two stimulus payments if you never received them. Better yet, a third stimulus check is also tied to your taxes this year. Even if you’re a non-filer, someone who doesn’t file taxes, that’s your case too.

When you file your taxes this year, it’s time to claim any stimulus check money missing from the first two checks as a Recovery Discount Credit. To help get your money faster, you should also take the time to set up direct deposit so you’re not waiting for a paper check to arrive. Also, with the third stimulus check coming in the middle of the 2020 tax season, you can file your taxes as quickly as possible, especially if your employment status has changed.

There are people who look forward to the tax season every year – those who wait for a refund, for example. This year, however, you have several good reasons to file your federal tax returns as soon as possible. In addition to the possible refund, your federal tax returns are tied to recovering your first two stimulus payments if you never received them. Better yet, a third stimulus check is also tied to your taxes this year. Even if you’re a non-filer, someone who doesn’t file taxes, that’s your case too.

When you file your taxes this year, it’s time to claim any stimulus check money missing from the first two checks as a Recovery Discount Credit. To help get your money faster, you should also take the time to set up direct deposit so you’re not waiting for a paper check to arrive. Also, with the third stimulus check coming in the middle of the 2020 tax season, you can file your taxes as quickly as possible, especially if your employment status has changed.

This tax season will probably be the most complicated one we’ve had to deal with due to further adjustments made to the numbers for stimulus checks and additional unemployment benefits. We’ll explain how your tax returns and stimulus checks are linked, how your dependents figure, and whether the stimulus payment is considered taxable income. Also, this is where a third stimulus check can come, as the IRS calculates the money you will receive and whether you can expect to receive a bigger or smaller check than before – or none at all.

How might my 2020 taxes affect the amount of a third stimulus check I might receive?

The amount of your third stimulus check is based on your 2019 or 2020 taxes, whichever the IRS filed at the time it determined your payment. If your situation has changed drastically between the two years, you could potentially get the full amount even if the IRS bases the check you send on your 2019 taxes. next year. Here’s everything you need to know about how tax season can affect your third check.

The schedule for sending the third stimulus check is mixing with tax season – April 15 is the tax return due date – which complicates things a bit, especially as the IRS is already matching stimulus money. makeup with your tax refund this year (below).

I’m losing money from the first two stimulus checks. How can I apply for a Recovery Discount Credit?

The December stimulus bill established a cut on January 15 for the IRS and the US Treasury to send the second stimulus payment to bank accounts and by mail as a check or EIP card. Unless the IRS has mailed your check by the deadline or your payment is caught in a direct deposit lock with tax preparers, you will need to claim the $600 stimulus check money as a recovery rebate credit on Form 1040 2020 or Form 1040-SR when you file your federal tax returns this year.

You can also claim the money the IRS owes you from the first round of stimulus checks, authorized last spring – millions are owed as recovery payments for dependent children.

To help find out if you’re missing a payment and by how much, the IRS provides a recovery rebate credit worksheet. You will need the amount calculated from the IRS from the letter the agency sent you, called Notice 1444 for the first payment and Notice 1444-B for the second payment.

When should I file a stimulus credit on my taxes?

According to the IRS, you will be able to claim nonpayment of your taxes now, with all payments made after filing. You can prepare your taxes now – through the IRS’ Free File tax preparation service, if you qualify to use it – or through a tax preparation service. The deadline for filing taxes is April 15 this year, but you can apply for a tax extension if you cannot meet the deadline.

What if I wait until April 15 for the tax due date or apply for an extension?

April 15 is the due date for all 2020 tax returns, but filing your taxes earlier will not only potentially expedite the delivery of any tax refunds you might collect, but will also position you to get any weeks of missing stimulus money. or even months faster. We’ve made a useful comparison chart here that looks at time.

The tax extension request will not defer payment of taxes due. These will still expire on April 15th; otherwise, you accrue interest on the amount, which you eventually have to pay in addition to income tax. And of course you are delaying receipt of stimulus payment.

If I file my taxes now, will that speed up or slow down my third stimulus payment?

It depends. As the IRS is now sending the third stimulus payment, a potential way to receive it soon is to ​​apply for direct deposit with the IRS, if you haven’t already done so. There is no guarantee, however, that the IRS will receive your bank information in time to use it for your payment.

What if I’m not a filer and I don’t normally file tax returns?

According to the IRS, non-tax filers must also complete Form 1040 or Form 1040-SR to claim Recovery Discount Credit. The IRS says that anyone with an income of $72,000 or less can file a federal income tax return electronically free of charge through the IRS Free File service.

Will I owe taxes on the money from the stimulus check I received?

No, a stimulus payment doesn’t count as income, so you shouldn’t pay taxes on it, the IRS said.

I didn’t file my taxes in 2019. Can I still get a stimulus check?

If you were not required to file a 2019 tax return because you were below income limits or because you receive federal benefits such as Social Security (including through SSI and SSDI programs), you may still qualify for one. payment. Up to 9 million people who fell into this non-filter category owed a first stimulus payment last fall.

While many people in this category should have received their second payment automatically, if the IRS does not send your money at the start of tax filing season, you will need to file a federal tax return this year to claim the missing payment as a rebate credit. recovery said the Tax Foundation.

How exactly is the amount of my stimulus payment related to my income tax return?

The IRS uses the adjusted gross income, or AGI, from your 2019 federal income tax return to calculate how much of your $600 payment and how much of your future payment your family will receive. (We explain here how the IRS calculates your total pay.) Your AGI may be a different amount than your annual salary or your net pay as it is based on a variety of factors. The IRS can use your AGI on your 2020 return to calculate your third payment.

How are taxes, stimulus checks and dependents tied?

For the second check, you can receive a payment of up to $600 for each dependent under the age of 17 you claim on your taxes. The definition was narrower than for dependents who would be eligible for certain credits under the tax law, including children aged 17 and over, dependents of any age with a disability, and older adult relatives.

Under the new law, payments of $1,400 go to a more broadly defined group of dependents. (Here’s what we know about your timeline.)

Am I still eligible for a stimulus payment if I lose my job or get a new one since I filed my taxes last year?

If your financial situation has changed after you filed your 2019 income tax return – for example, if you received less income – you can claim this additional amount on your 2020 income tax return when you file this year.

Will the overall amount of the stimulus payment I received affect how much I owe with this year’s taxes?

If you received a payment last year, this will not reduce your tax refund or increase what you owe when filing your 2020 tax return this year. The payment also does not count as income for purposes of determining whether you are eligible for federal government assistance or benefit programs.

Could my 2019 tax return help speed up the missed stimulus payment?

Depending on your personal tax situation, the Missing Stimulus Money Recovery Discount Credit would reduce the total amount you owe the IRS or give you a larger tax refund.

If the IRS has your direct deposit information from a previous federal income tax return, the agency will attempt to deposit your check into the bank account you provided. If you receive your tax refund by check in the mail, however, or if your IRS information or your banking information is out of date, the agency will mail your refund. The IRS did not accept direct deposit information for the $600 check, but you should consider registering a new direct deposit account with your 2020 tax form.

Will I have to return my stimulus check money to the IRS if I qualify for less with next year’s taxes?

You will not be required to refund a stimulus payment if, based on your 2020 tax returns, you no longer qualify for the amount you received. That’s when the IRS expects you to return full or partial stimulus check payments.

Will the IRS withdraw my money from the stimulus check to cover other expenses I owe, such as federal taxes?

For the second check, the IRS will not reduce your stimulus payment to cover any past-due child support you owe, and debt collectors cannot garnish your payment either.

However, the Consolidated Appropriations Act protections that prevented the IRS from adorning your stimulus check for unpaid taxes do not apply to people who are claiming their lost stimulus checks on their tax returns.

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