- A new stimulus check update should be coming soon, with Congress set to begin work in a matter of days on President Biden’s economic rescue package that includes funding for a new round of $1,400 stimulus checks.
- Meanwhile, tax filing season is about to begin, and the coronavirus pandemic created a host of challenges that could end up having an impact of some kind on your 2020 tax return.
- Here’s what taxpayers need to know, including how to use their 2020 tax return to claim stimulus money they’re still waiting on.
Pretty soon it will be the most wonderful time of the year again … if you work for the IRS.
Millions of Americans right now are still awaiting a stimulus check update to see if and how much of a third stimulus check Congress will approve — President Biden is pushing for a new round of $1,400 checks, though he’s said he’s open to negotiating that — but we’re also just days away from the start of tax filing season for 2020. Last year was an extraordinary year for so many reasons, and many of the ripple effects of the coronavirus pandemic (like the issuance of stimulus checks and people who lost their jobs collecting increased unemployment benefits) will have tax consequences on 2020 tax returns this year. Here’s some of what you need to know.
For starters, this is what you need to do before filing your 2020 tax return if you think or know there’s still stimulus money you haven’t yet received. Many Americans still haven’t received at least one of the stimulus checks that were distributed last year (via the CARES Act that was passed in March and the $900 billion COVID relief bill that was passed in December) or they might also have received only a portion of the full amount they’re owed.
As noted, we’re still in a holding pattern and waiting to see whether Congress will approve the $1,400 stimulus checks that President Biden has pushed for — which is to say, the disbursement of new stimulus checks as of right now is finished. But don’t worry if you still haven’t received some stimulus money you’re owed — you can claim it on your 2020 tax return. You’ll want to first utilize this stimulus check calculator to determine how much money you should have received from the first CARES Act payment, and then use this calculator to see how much you should have received from the second stimulus check from December, thanks to the legislation that was passed as President Trump’s time in office was winding down.
After that, head to the IRS’ Recovery Rebate page, which explains how to claim the amount of stimulus money you’re owed in the form of a tax credit that will reduce your 2020 income tax obligation. You’ll claim this amount on Line 30 of your 2020 tax return, and if you’re due a refund this year, the stimulus payment will be added to it.
Two other key points to know:
- Stimulus check money is not taxable. If you received one or both of the two previous stimulus checks already, or even only partial amounts, it won’t be counted as income you received in 2020.
- Unemployment income, however, is taxable. Remember all the legislative maneuvering last year that included temporary hikes in aid to jobless workers? All those unemployment checks represent taxable income and may give those workers a nasty surprise when it’s time to file their 2020 tax return, starting in a couple of weeks.