The second round of stimulus checks are starting to wrap up, and there are now a few things that Americans should know about how the payments are connected to the 2020 tax season. The final payments from the most recent coronavirus relief bill are being sent out over the next few days, and after that, no more will be sent. There is already talk of a third stimulus bill, which has been proposed by President-elect Joe Biden. However, it's important that citizens know how the stimulus payments are, in many cases, contingent on your taxes.
For starters, as C-Net points out, the amount of stimulus money that you receive is based on the most recent tax return that the IRS has on file. This is important because your annual income is how the IRS determines what stimulus payment amount you are eligible to receive. It's very important to make sure this is reflected correctly because someone who is making less money now would possibly be eligible for a higher payment than what their previous tax return reflects. Additionally, the department uses your tax return to determine if you have eligible dependents, as they too would likely qualify for a payment. This is especially important for anyone who has recently welcomed a new child into their family, as they may not have been eligible for the dependant payment with the first, or even second payments, but might be for the possible third payment.
The tax filing season will begin Feb. 12 to allow for critical programming necessary to help ensure #IRS systems run smoothly after recent tax law changes. See: https://t.co/B7vz2oCR5e pic.twitter.com/npWMxyg4nZ— IRSnews (@IRSnews) January 15, 2021
For anyone who has not received their stimulus payments, but believes they should have been eligible, there will be an option to claim the money on your 2021 tax filings. On the flip side, for those who did get their payments, you will not have to claim it as income, because the IRS does not define it this way. Also, stimulus payments will not impact your tax return amount, meaning that you will not get less than your tax paperwork determines, just because you received a stimulus payment.
Notably, the IRS has announced that the tax filing season will be pushed back a little this year. Taxpayers will not be able to begin filing until Feb. 12. This is likely due to how busy the department has been over the past year, with sending out stimulus payments and handling the 2020 tax filings.