Still no stimulus test? What that means for your tax return this year
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If you didn’t get your $ 600 stimulus check, the good news is good news: you may still be able to claim the money when you file your taxes.
The second $ 600 stimulus checks approved by Congress in December included $ 600 per person, or $ 1,200 per couple submitting together, plus $ 600 per child under the age of 17.
Last week the IRS announced that it had sent all “legally permissible” stimulus checks and is now planning to turn its attention to the February 12 tax return.
To date, more than 147 million second stimulus checks totaling $ 142 billion have been conducted, the tax authority said.
Individuals and families can claim any missing money through a refund credit on their tax return.
It’s not just people who didn’t get $ 600 checks to get more money. This also applies to those who did not receive the first check for $ 1,200 they were entitled to. (This does not include the new $ 1,400 stimulus checks still to be negotiated in Congress.)
Now these individuals and families can be “replenished” for lack of funds. In general, those who have received overpayments do not need to repay these amounts.
However, you may not automatically receive the full $ 600 or whatever amount you think is owed.
The reason: The refund credit is part of your total return, including any tax liability.
So if you get $ 600 Stimulus Check credit but owe $ 500, you get a payment of only $ 100.
“If you owe money, you will still owe money,” said Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
How to claim your refund balance
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This year, filers using the traditional Senior Form 1040 and 1040-SR will be able to claim the recovery discount on line 30. This includes a separate worksheet that you can use to calculate the amount due.
The first or second payment eligibility communications previously sent by the government can help you determine the amounts for which you can qualify. However, the section also applies to those who were overlooked and did not receive these communications.
For people who expected a payment but didn’t receive one, the worksheet will help determine whether you should get one, said Susan Allen, senior manager of tax practices and ethics at the American Institute of Certified Public Accountants.
Many people will likely choose to use either an automated accountant or an accountant to help them with this process. In addition, there are free storage options available.
Those who feel they don’t have economic funds may want to apply as early as possible, Allen said.
When you get a refund credit, it reduces every other tax liability dollar for dollar, according to Garrett Watson, senior policy analyst at the Tax Foundation.
You could owe money if, for example, you did not withhold taxes from your paycheck or unemployment benefits.
“The good news is that it reduces the amount you would otherwise have owed,” said Watson. “You are being held harmless from a net benefit standpoint, but it’s not as liquid as a direct review earlier in the year.”
Since the refund rebate is calculated from 2020 gross adjusted income, consider whether your payment eligibility changes from previous stimulus payments that were based on either 2018 or 2019 returns, especially if your income has declined over the past year.
In general, individuals earning up to $ 75,000 are eligible for full payments, as are heads of household with incomes up to $ 112,500 and married couples up to $ 150,000. Payments will be gradually reduced and ultimately ceased entirely for higher earners.