Stimulus $600

[Ronstar]

I’m confused. Are we to include this stimulus $ and the previous one as income on our tax returns? In discussing Roth conversions with my tax guy, he said the previous $1200 checks would not be taxed. Maybe he misunderstood my question.

 

[audreyh1]

No, not taxed.

 

[cathy63]

I’m confused. Are we to include this stimulus $ and the previous one as income on our tax returns? In discussing Roth conversions with my tax guy, he said the previous $1200 checks would not be taxed. Maybe he misunderstood my question.

The stimulus payment amounts are used on your tax return, but they are not income and you do not pay any tax on them. They are a credit, and if you were entitled to more stimulus than you received, you get to subtract that amount from the tax owed.

For example, suppose you got a payment of $800 and a payment of $400 for a total of $1200; but your 2020 income is low enough that you should have gotten the full $1800. The government owes you $1800-$1200 = $600, and when you file your return, that amount will either be subtracted from the tax you owe or added to your refund.

If you get the full $1800 in advance, then the line on your tax return where you claim the additional stimulus amount due to you will just be $0. You won't owe any more tax but you won't get any additional benefit either.

 

[Ronstar]

^ thanks !

 

[aaronc879]

Mine just showed up as pending but won't be available until Jan 4th. I have been having a lot of back issues so I think I may spend this money on massages.

 

[scrabbler1]

The stimulus payment amounts are used on your tax return, but they are not income and you do not pay any tax on them. They are a credit, and if you were entitled to more stimulus than you received, you get to subtract that amount from the tax owed.

For example, suppose you got a payment of $800 and a payment of $400 for a total of $1200; but your 2020 income is low enough that you should have gotten the full $1800. The government owes you $1800-$1200 = $600, and when you file your return, that amount will either be subtracted from the tax you owe or added to your refund.

If you get the full $1800 in advance, then the line on your tax return where you claim the additional stimulus amount due to you will just be $0. You won't owe any more tax but you won't get any additional benefit either.

You explained this well, and this is how I built it into my skeleton tax form spreadsheet. Because in ER I never have any taxes withheld, I always owe taxes less any ACA premium tax credit in excess of any of it paid throughout the year (which I expect to be the case this year). Then, I expect to be able to offset the remaining amount due against the $600 stimulus amount I won't be getting because the 2019 income on which it is based is too high (they somehow used my 2018 income for the earlier check). Those 2 tax credits taken together, I'll be getting a pretty decent refund for the first time ever!

 

[W2R]

Mine just showed up as pending but won't be available until Jan 4th. I have been having a lot of back issues so I think I may spend this money on massages.

That's a great idea!

Mine isn't even pending yet so I am practicing patience right now.

 

[Rambler]

I won’t be getting any. Both of our kids will. That said, they didn’t lose any income. We lost income from dividends as a few of our companies suspended them. But we still would not qualify, which is a good problem to have, and for which we are grateful. My own personal opinion is that the folks who lost income should be the main beneficiaries of any stimulus, and that would include landlords and banks who cannot evict due to non-payment of rents and mortgages. I have a hard time comprehending the message from congress that “the ‘people’ are suffering so we need to give everyone $xx dollars” when the people who are suffering are the ones that lost their jobs and incomes, not the other 93.xx% of workers who are still employed. I’m not an economist, but when a stimulus check is just banked, it does little good in the way of economic stimulation.

 

[GenXguy]

The first $1200 credit in the CARES Act was written to be based on 2018 or 2019 tax returns.

This latest $600 credit that just passed appears to me to have the "2018 tax return" language removed.

Thus a person needs to either qualify for the advance credit based on their 2019 AGI and tax return or claim the credit based on their 2020 AGI and tax return.

Yeah, I've since read the same thing when I finally looked into it further.

Unfortunately, I cannot claim the credit to get any $ on my 2020 return because my AGI is above the high threshold where it drops to $0 stimulus despite maxing out my 457B.

Looks like I won't be able to stimulate the economy any extra after-all.

 

[Lawrencewendall]

Haven't seen anything but DW sure has being doing her part to support the economy (thanks Amazon!). May not be the AMERICAN economy but it's someone's.

 

[RobbieB]

Like I said, it's already spent. I've been stimulating the economy ever since I retired.

 

[audreyh1]

Like I said, it's already spent. I've been stimulating the economy ever since I retired.

You sure have! Especially the gourmet food ordering sites!

 

[Surewhitey]

It would be less economy-stimulating if only needy people got it. They would only pay the debts that they're behind on & groceries, in theory. Everyone else is expected to be the stimulus...

 

[street]

^ very true!!

 

[garyt]

It would be less economy-stimulating if only needy people got it. They would only pay the debts that they're behind on & groceries, in theory. Everyone else is expected to be the stimulus...

Most other people will just save it

 

[Koolau]

That's a great idea!

Mine isn't even pending yet so I am practicing patience right now.

Heh, heh, short of going to my B & M bank, I wouldn't know how to check. One of the disadvantages of being a dinosaur, I guess but YMMV.

 

[wrigley]

I wish it would only go to folks that really need it too, but I guess we can figure out a way to donate. I’m really surprised folks are getting deposits so soon. It seems like the folks that need it the most have to wait the longest. I guess the formula is much different from the first time. We don’t get much this time around.

IMPOSSIBLE for the government to weed out only the people that truly need the money. There are SOOOOOOO many scammers out there that would ruin it for the needy!


Mike

 

[RxMan]

I just checked our bank account and nothing yet. No rush for us though.

We gave a chunk of the first stimulus money to our local food bank. I’ve already discussed it with DW and we plan to do the same with this money.

I’m sure there is also a local charity that is in need. We’ve been blessed this year and want to try and help some of the many people who have been struggling.

I’m very thankful that I didn’t suffer any lapse in employment in 2020. I was also able to smoothly transition towards working from home full time. I know many people weren’t so fortunate. I hope 2021 will be better for all of us.

 

[carnivalday]

I did not receive the first stimulus check, as I had made too much money in 2018, and hadnt filed my 2019 taxes in time to have it based on that (in which I owed zero taxes and had none taken out, since I had retired).

Since I got no refund for 2019 taxes, I didnt have my banking info on the return. I did have my banking info on my 2018 return, as I owed taxes. Will the IRS use that banking info? So far theres nothing there.

If I dont get the $600 check, am I basically screwed out of both payments? When I file my 2020 taxes, I will not owe any taxes for 2020, so theres nothing to deduct the $600 off of. As you can see, Im so confused.....

 

[cathy63]

I did not receive the first stimulus check, as I had made too much money in 2018, and hadnt filed my 2019 taxes in time to have it based on that (in which I owed zero taxes and had none taken out, since I had retired).

Since I got no refund for 2019 taxes, I didnt have my banking info on the return. I did have my banking info on my 2018 return, as I owed taxes. Will the IRS use that banking info? So far theres nothing there.

If I dont get the $600 check, am I basically screwed out of both payments? When I file my 2020 taxes, I will not owe any taxes for 2020, so theres nothing to deduct the $600 off of. As you can see, Im so confused.....

According to the law, the money can go into any account that you used for an electronic tax payment or tax refund after January 1, 2019. If your 2018 return was filed in 2019, they can use that info.

But ... this is a pretty mad scramble to get these payments out, and I wouldn't be too surprised if they aren't able to send them to some of the people who didn't qualify for the first payment. If that happens and you don't get the payment by January 15, then you will still be able to claim both payments on your 2020 return. Even if you owe $0 in taxes for 2020, you can still get up to $1800 in stimulus payments refunded to you.

 

[carnivalday]

Oh thats good news. thanks.

 

[Gumby]

Here is the H&R Block calculator to determine how large your payment will be. https://www.hrblock.com/coronavirus-tax-impact/calculator/

Note that if you file as MFJ and your AGI was more than $174,000 in 2019, you won't receive any money. That's because they halved the amount of the payment but did not change the reduction formula ($5 reduction for every $100 above the $150k threshold.).

 

[Dog]

Had an email notice of the pending deposit from NFCU. I’m impressed with how quickly they got the $ out this time!

 

[almosttime]

Mine just showed up as pending but won't be available until Jan 4th. I have been having a lot of back issues so I think I may spend this money on massages.

As a licensed massage therapist, I thank you! Please wear a mask during the entire massage, and be sure that your LMT does as well.

 

[Lawrencewendall]

USAA says the stimulus hit our account.