Attention: Your tax refund for the current tax year will not be affected by stimulus checks
This subsidy will really be an advance credit for your 2020 taxes. For this reason, they will not be subject to refund or tax rates.
We have received countless questions by different means about paying taxes and receiving stimulus checks. Here is a more in-depth explanation of this topic:
With the stimulus payments, are we receiving credit for the 2020 tax payment in advance? Are taxes due for having received this stimulus?
It must be understood that the unique stimulus payments that come from the Cares law are effectively an advance on the reimbursement that they would obtain in the year 2021, these stimulus payments are advances that the IRS makes to people in these moments of crisis.
The stimulus payment is a tax refund and is therefore not taxable.
President Trump and Congress approved in late March, through the Cares ACT, an aid to American taxpayers by offering stimulus money for multiple businesses.
People who qualify for this aid, according to this decree, are based on the taxes paid relative to per capita income during the years 2018 and 2019. For this reason, the households with adults who paid taxes will receive $ 1,200 each and an additional $ 500 for each child under 17 included in the household, up to a total income of $ 75,000 per individual or $ 150,000 for joint filings. If income exceeds those barriers, the stimulus will be less.
If the above taxes showed income greater than $ 99,000 per individual or $ 198,000 per joint filing, they will not be entitled to any stimulus payment.
Read more: What is the use of declaring bankruptcy?
In addition, those who qualify and receive this stimulus will not have to return anything, since it is an early refund that the Government is giving them. For this reason, this help is called early repayment.
Reviewing the Cares ACT, page 144 says that the aid will be delivered as a credit against the tax … for the first fiscal year that begins in 2020.
Passing this to figures as an example would be like this:
The person will report an income of $50,000 and pay taxes of $1,000.