With the second economic stimulus payment going out and tax season underway, you may be wondering if you have to pay taxes on the stimulus checks you received.
So, do you have to pay taxes on the economic stimulus payments you received?
The answer is no, the stimulus checks aren’t considered to be income and you do not have to pay taxes on them. There have been two rounds of stimulus payments made, and the amount received was based on the adjusted gross income reported on your most recent tax return (2018 or 2019).
With that said, there are some people who didn’t receive a check and others who did not receive a large enough payment resulting from income limits or an unexpected life event (unemployment, birth of a child). So, if you didn’t receive enough and are owed more money from those two rounds of stimulus, you can claim the full amount in your 2020 tax return, and the IRS will send it to you via your tax refunds.
Conversely, if your income was higher in 2019 or 2020 compared to the previous tax returns (used to calculate your payments), you may have received more than you were actually entitled to. If that is the case, the IRS cannot ask for any of that money back from you.
For more Tax Return Considerations, click here.
Davis & Hodgdon Associates CPAs has been assisting individuals and businesses throughout Vermont and New England for more than 30 years so please reach out to us in Williston (802-536-1831) or Rutland (802.775.7132) to talk with a tax professional today to be sure your tax return is in order. You can also email us at [email protected].