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Old 12-28-2020, 10:01 AM   #21
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My 2019 income was too high to be eligible for a stimulus check. However, I still received one earlier this year for $1,200 because, I assume, it was based on my 2018 income which was low enough to qualify for it.


My 2020 income will also be low enough to qualify for the latest $600 check. However, because they are basing it on my still-too-high 2019 income, I will have to claim it as a credit on my 2020 tax return. Is this correct? I can use this $600 to offset any amount I would owe on my 2020 tax return, even turn what I owe if less than $600 into a refund of whatever amount is left over. Is this correct, too?
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Old 12-28-2020, 10:28 AM   #22
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Quote:
Originally Posted by scrabbler1 View Post
My 2019 income was too high to be eligible for a stimulus check. However, I still received one earlier this year for $1,200 because, I assume, it was based on my 2018 income which was low enough to qualify for it.


My 2020 income will also be low enough to qualify for the latest $600 check. However, because they are basing it on my still-too-high 2019 income, I will have to claim it as a credit on my 2020 tax return. Is this correct? I can use this $600 to offset any amount I would owe on my 2020 tax return, even turn what I owe if less than $600 into a refund of whatever amount is left over. Is this correct, too?
I believe you understand correctly.

I should get a partial credit on my 2020 taxes since I didn't get the full payment earlier this year and likely won't get the full $600 of the next stimulus check.
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Old 12-28-2020, 10:41 AM   #23
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Quote:
Originally Posted by scrabbler1 View Post
My 2019 income was too high to be eligible for a stimulus check. However, I still received one earlier this year for $1,200 because, I assume, it was based on my 2018 income which was low enough to qualify for it.

My 2020 income will also be low enough to qualify for the latest $600 check. However, because they are basing it on my still-too-high 2019 income, I will have to claim it as a credit on my 2020 tax return. Is this correct?

I can use this $600 to offset any amount I would owe on my 2020 tax return, even turn what I owe if less than $600 into a refund of whatever amount is left over. Is this correct, too?
I don't think anybody knows yet. I took a quick glance at the text of the bill and it looks to me like it says it's a tax credit for 2020, just like the previous stimulus. The problem is, the IRS already issued the "final" 1040 and instructions for the 2020 tax year and there's a way to reconcile the original recovery rebate, but obviously this second one is not included. Will they have to amend the form and instructions? Will every software vendor have to rework their calcs for the 1040? Will the IRS be able to accept returns staring in late January as usual, or will they have to wait until the rebate checks are completely distributed so that everybody will know what the heck to put on their returns?

Stay tuned. I'm sure answers will be coming in the next 2 to 3 weeks.
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Old 12-28-2020, 11:17 AM   #24
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Originally Posted by cathy63 View Post
I don't think anybody knows yet. I took a quick glance at the text of the bill and it looks to me like it says it's a tax credit for 2020, just like the previous stimulus. The problem is, the IRS already issued the "final" 1040 and instructions for the 2020 tax year and there's a way to reconcile the original recovery rebate, but obviously this second one is not included. Will they have to amend the form and instructions? Will every software vendor have to rework their calcs for the 1040? Will the IRS be able to accept returns staring in late January as usual, or will they have to wait until the rebate checks are completely distributed so that everybody will know what the heck to put on their returns?

Stay tuned. I'm sure answers will be coming in the next 2 to 3 weeks.
Checking the IRS website, the 1040 form for 2020 has been finalized. But the instructions have not been finalized yet, they are still in draft form. The instructions include a worksheet (page 57) for determining the credit if one doesn't receive the full amount. So, that worksheet could, in theory, be changed to allow for both credits even though it is set up now for only the first one.

I agree that a change at this point could case some havoc for tax programs already put out there. And your other questions are good ones, too.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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Old 12-28-2020, 11:19 AM   #25
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Oh, I didn't realize the instructions were still in draft. Good catch!
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Old 01-13-2021, 10:06 AM   #26
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Oh, I didn't realize the instructions were still in draft. Good catch!
The 2020 general instructions for Form 1040 are now in usable form, out of Draft status.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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