Now that tax season has arrived again, many are wondering if the two stimulus checks Americans received will affect their 2020 return or payment. According to CNN, stimulus checks are tax-free, however, the special pandemic unemployment benefits are treated as income and could affect American's taxes. If money has not already been withheld from taxes, some could owe money. On the other hand, some might receive more stimulus cash when they filed their 2020 return, because the stimulus checks handed out were calculated using 2018 or 2019 income.
While billions of dollars were distributed in 2020 and 2021 to families across the board, those who lost their job last year could see more money this year, and claim it on their return. During the first round of handouts, 160 million Americans received a check worth up to $1,200, and that number was doubled for couples. The second stimulus check that was distributed was worth up to $600. Those amounts are determined based on a sliding scale, and begin to phase out for individuals who make more than $75,000, households that earn more than $112,500, and for married couples filing for joint earnings more than $150,000.
The money given as a stimulus check is not taxed because the payments are an advance on a 2020 tax credit. However, this year's return will allow Americans to claim more money if they did not receive the full amount in which they were due. Just before President Joe Biden stepped in as commander-in-chief, former President Donald Trump said he wanted Americans to have their second stimulus check be a total of $2,000 instead of $600. When that didn't happen, Biden has fought to hand out more money that would have totaled out to $2,000, but there's been a snag in that plan.
The new sitting president received backlash from Republicans while trying to push for an extra $1,400 for Americans. While he could still pass the bill without their support, it would tarnish his reputation for bipartisan compromise. He unveiled his $1.9 trillion stimulus plan before he even took office, and Republicans have condemned it from the start. Experts say that Biden could likely pass the bill without their approval through the budget reconciliation process, knowing that most Democrats would support him. However, doing so would provide ammunition to critics who will say that Biden's calls for "unity" and his professed ability to reach across the aisle were just talk.