Getting stimulus $....on the backend

[cathy63]

What hasn't been said is: based on which tax year ?
Aren't all 2020 forms are all done.
Or will we be able to include entry in 2021 tax year to get the $$ if no check is received ?

According to the text of HR 1319, the $1400 stimulus payment is an advance tax credit against your 2021 taxes. If you have already filed your 2020 return, the IRS will guess, based on the info on that return, whether or not you are entitled to the new payment. If you have not filed your 2020 return, they will use your 2019 return to guess from.

If you do not get the stimulus now because your 2020/2019 income excludes you, or because you file on paper and your returns are still sitting in a pile of IRS mail, or for any other reason, then you will get it when you file your 2021 taxes in 2022.

This is exactly the same process as the prior stimulus payments. Everything is just moved forward one year.

 

[Golden sunsets]

According to the text of HR 1319, the $1400 stimulus payment is an advance tax credit against your 2021 taxes. If you have already filed your 2020 return, the IRS will guess, based on the info on that return, whether or not you are entitled to the new payment. If you have not filed your 2020 return, they will use your 2019 return to guess from.

If you do not get the stimulus now because your 2020/2019 income excludes you, or because you file on paper and your returns are still sitting in a pile of IRS mail, or for any other reason, then you will get it when you file your 2021 taxes in 2022.

This is exactly the same process as the prior stimulus payments. Everything is just moved forward one year.

Cathy. You state "An advance against 2021 taxes". So if 2019 income exceeded the income threshhold, 2020 income does qualify you for the new payment, but that return has not bee filed yet, and 2021 income exceeds the income level stated in the American Rescue Plan Act, what happens then? Our assumption is the 2021 tax forms will allow one to claim the $1,400 payment in the same way that the 2020 return allowed us to recapture the first 2 payments. Is the assumption reasonable? Is it even spelled out yet in the final language of the Act to approved today?

 

[cathy63]

Cathy. You state "An advance against 2021 taxes". So if 2019 income exceeded the income threshhold, 2020 income does qualify you for the new payment, but that return has not bee filed yet, and 2021 income exceeds the income level stated in the American Rescue Plan Act, what happens then? Our assumption is the 2021 tax forms will allow one to claim the $1,400 payment in the same way that the 2020 return allowed us to recapture the first 2 payments. Is the assumption reasonable? Is it even spelled out yet in the final language of the Act to approved today?

The exact wording in the bill is "In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2021 an amount equal to the 2021 rebate amount determined for such taxable year." It then goes on to define "2021 rebate amount" and "eligible individual" and state that this is a refundable credit.

The next part says that they're going to advance an amount equal to the expected tax credit to you if they have enough info to do so, and that "each individual who was an eligible individual for such individual’s first taxable year beginning in 2019* shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year." *2020 if you already filed a 2020 return.

When you unwind these statements into plainer English, they are telling you that you will figure the 2021 rebate on your 2021 return and subtract the amount you received in advance, which is how it worked for 2020.

 

[Philliefan33]

I bolded in 2 places the 2021 you wrote above. Did you mean to write "2022," referring to when we file our 2021 returns?

I meant filing the TY 2021 tax return, which will happen in 2022.

 

[Bigbass]

Per Kiplinger -

The IRS began accepting 2020 tax returns on February 12. Since some people have already filed their 2020 return and some people haven't, eligibility for and the amount of your third stimulus check will be based on either your 2019 or 2020 return. According to the American Rescue Plan, if your 2020 tax return isn't filed and processed by the time the IRS starts processing your third stimulus payment, the tax agency will use information from your 2019 tax return. If your 2020 return is already filed and processed when the IRS is ready to send your payment, then your stimulus check eligibility and amount will be based on information from your 2020 return. If your 2020 return is filed and/or processed after the IRS sends you a stimulus check, but before July 15, 2021 (or September 1 if the April 15 filing deadline is pushed back), the IRS will send you a second payment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return.

 

[Golden sunsets]

Thanks Bigbass and Cathy63. I did speak with our CPA today and he will likely get the return finished today and with our approval filed tomorrow or Friday. I am not dumb but still confused regarding the language/ analysis you both conveyed. Assuming our return is filed and processed before the IRS "looks at" our filings to determine if we qualify for the 3rd payment and the IRS determines we qualify and do send us the payments, what happens when we file our 2021 return if our income exceeds the threshold? Can they claw back the payment? If so I see no reason to file now to receive a payment that we aren't really entitled to and will need to pay back. My sense is there was no clawback for stimulus payments made in 2020 based on 2019 income where 2020 income exceeded the threshold.

Thanks to you both for your opining[emoji16].

 

[sergio]

Just curious - we're in a really odd position in that our 2020 AGI (>$150k MFJ) was much higher than 2019 (<$150k MFJ) due to a one-time sale of part of our business. We got all the rounds of stimulus last year. Does this mean I should file my return as late as possible this year in order to get any potential stimulus payments this summer? I'm thinking of filing an extension.

 

[Big_Hitter]

Fast forward to 2020 taxes with a more modest line 11 taxable number and lo and behold, $3600 on the backend - tax credit/return.

Pleasant surprise.

yep, plus the new stimulus money will be based off the 2020 return you just filed - retiring in 2019 turned out to be a good decision for us

 

[cathy63]

Thanks Bigbass and Cathy63. I did speak with our CPA today and he will likely get the return finished today and with our approval filed tomorrow or Friday. I am not dumb but still confused regarding the language/ analysis you both conveyed. Assuming our return is filed and processed before the IRS "looks at" our filings to determine if we qualify for the 3rd payment and the IRS determines we qualify and do send us the payments, what happens when we file our 2021 return if our income exceeds the threshold? Can they claw back the payment? If so I see no reason to file now to receive a payment that we aren't really entitled to and will need to pay back. My sense is there was no clawback for stimulus payments made in 2020 based on 2019 income where 2020 income exceeded the threshold.

Thanks to you both for your opining[emoji16].

No, there is no clawback if you receive a payment based on 2019/2020 income and then your 2021 income exceeds the limit. I didn't quote that part of the bill, but it's in there, same language as the previous bills, but applying to 2021.

 

[cathy63]

Just curious - we're in a really odd position in that our 2020 AGI (>$150k MFJ) was much higher than 2019 (<$150k MFJ) due to a one-time sale of part of our business. We got all the rounds of stimulus last year. Does this mean I should file my return as late as possible this year in order to get any potential stimulus payments this summer? I'm thinking of filing an extension.

Yes. Either file as late as possible (make sure you pay what you owe on April 15 to avoid a penalty, even if you file for an extension); or wait and collect the stimulus payments when you file your 2021 return next year.

 

[Bryan Barnfellow]

Per Kiplinger -

The IRS began accepting 2020 tax returns on February 12. Since some people have already filed their 2020 return and some people haven't, eligibility for and the amount of your third stimulus check will be based on either your 2019 or 2020 return. According to the American Rescue Plan, if your 2020 tax return isn't filed and processed by the time the IRS starts processing your third stimulus payment, the tax agency will use information from your 2019 tax return. If your 2020 return is already filed and processed when the IRS is ready to send your payment, then your stimulus check eligibility and amount will be based on information from your 2020 return. If your 2020 return is filed and/or processed after the IRS sends you a stimulus check, but before July 15, 2021 (or September 1 if the April 15 filing deadline is pushed back), the IRS will send you a second payment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return.

That is my understanding as well.

-BB

 

[38Chevy454]

So the net effect is to either:
1) File your 2020 tax returns ASAP if your 2020 numbers are below the $75-80K/single or $150-160K/MFJ thresholds and your 2019 amounts were above these limits. This gets your the $1400 (or graduated less)/person stimulus money

2) Wait to file 2020 tax returns if 2020 numbers are above the limits, but your 2019 numbers are below the limits. This gets you the $1400 (or graduated less) as well.

Or:

3) File whenever works for your situation if your 2019 and 2020 numbers are above the limits and you won't be eligible for any of the stimulus money.

 

[scrabbler1]

I had a similar income spike in late 2019 but my pleasant surprise was a little different from yours. I filed my 2019 tax return in mid-March so when they announced sending out checks in early April I was sure I wouldn't get one, expecting to have to file for it in my 2020 tax return. But, lo and behold, I got a check anyway, presumably because they somehow used my 2018 tax return (which showed a lower income), or maybe hadn't yet processed my 2019 return.

My too-big 2019 income has prevented me from getting the recent $600 check. However, my smaller 2020 income, along with an excess ACA premium subsidy (also made possible by a much smaller 2020 income), will be used to turn my usual tax owed (around $900) into a small refund, a most pleasant surprise.

I just signed up for an online account with the IRS and when I viewed my account history, I found a few surprises.

First, not only has the IRS not processed my 2020 return, they haven't processed my 2019 return, either! I filed that return in early March of 2020. They did cash my small check, though. This means (which they also stated) they used my 2018 return to deem me qualified to receive the first stimulus check last May.

This also means I doubt I'll get the recent $1,400 check any time soon. Yes, there is something about the IRS doing a second pass of 2020 tax returns so they can send out more checks in July. Would the IRS process my 2020 return before they process my 2019 return? At least I didn't roll over any refund from 2019 into 2020.

But if the IRS uses my 2018 return to determine eligibility for the current $1,400 check, I won't get one even though I did qualify me for the first check. This is because my income in 2018 was $65k, small enough for the first check but not for this third one and its lower limit.

 

[cathy63]

I just signed up for an online account with the IRS and when I viewed my account history, I found a few surprises.

First, not only has the IRS not processed my 2020 return, they haven't processed my 2019 return, either! I filed that return in early March of 2020. They did cash my small check, though. This means (which they also stated) they used my 2018 return to deem me qualified to receive the first stimulus check last May.

This also means I doubt I'll get the recent $1,400 check any time soon. Yes, there is something about the IRS doing a second pass of 2020 tax returns so they can send out more checks in July. Would the IRS process my 2020 return before they process my 2019 return? At least I didn't roll over any refund from 2019 into 2020.

But if the IRS uses my 2018 return to determine eligibility for the current $1,400 check, I won't get one even though I did qualify me for the first check. This is because my income in 2018 was $65k, small enough for the first check but not for this third one and its lower limit.

Yes, they can process your 2020 return before your 2019 return, especially if you e-filed 2020 and paper-filed 2019.

They can't use your 2018 return to determine whether or not you get the 3rd stimulus payment, only 2019 or 2020 returns. They should use your 2020 return to send the payment later this year, once they've processed it. A single person with $65K income would still get the entire $1400 payment.

 

[Golden sunsets]

Finally received notification that our 2020 return has been processed and we will get our refund on 3/31. Great. Now I wonder if we will have to wait until the next look back at 2020 returns, slated for 7/15 or later, or if they are still processing the Stimmy #3 payments. Does anyone know? No biggy either way, but I like to know these things.

 

[The Cosmic Avenger]

Finally received notification that our 2020 return has been processed and we will get our refund on 3/31. Great. Now I wonder if we will have to wait until the next look back at 2020 returns, slated for 7/15 or later, or if they are still processing the Stimmy #3 payments. Does anyone know? No biggy either way, but I like to know these things.

From what I have read you should be getting #3 based on your 2019 AGI. If you didn't qualify based on your 2019 AGI but you do for 2020, then yes, for this first wave you were probably considered ineligible, so you'll probably be getting it in July or August.

 

[scrabbler1]

Yes, they can process your 2020 return before your 2019 return, especially if you e-filed 2020 and paper-filed 2019.

They can't use your 2018 return to determine whether or not you get the 3rd stimulus payment, only 2019 or 2020 returns. They should use your 2020 return to send the payment later this year, once they've processed it. A single person with $65K income would still get the entire $1400 payment.

Oops, you're right about the income limit being higher than $65k, although it wouldn't matter for the 2021 check using my 2020 income which was only $31k. I didn't e-file 2019 or 2020, so I hope they do 2020 first.

 

[Big_Hitter]

Fast forward to 2020 taxes with a more modest line 11 taxable number and lo and behold, $3600 on the backend - tax credit/return.

indeed, just as I had envisioned...

 

[scrabbler1]

I just signed up for an online account with the IRS and when I viewed my account history, I found a few surprises.

First, not only has the IRS not processed my 2020 return, they haven't processed my 2019 return, either! I filed that return in early March of 2020. They did cash my small check, though. This means (which they also stated) they used my 2018 return to deem me qualified to receive the first stimulus check last May.

This also means I doubt I'll get the recent $1,400 check any time soon. Yes, there is something about the IRS doing a second pass of 2020 tax returns so they can send out more checks in July. Would the IRS process my 2020 return before they process my 2019 return? At least I didn't roll over any refund from 2019 into 2020.

But if the IRS uses my 2018 return to determine eligibility for the current $1,400 check, I won't get one even though I did qualify me for the first check. This is because my income in 2018 was $65k, small enough for the first check but not for this third one and its lower limit.

Update on this: The IRS did process my 2020 return (not my 2019 return, yet) in the last 2 weeks. I also learned that a ($1,4000 check will be mailed out on May 7th.

I am already likely to be due a refund on my 2021 taxes next year, so I won't need the $1,400 to act as a credit against taxes due. The increased ACA subsidy midyear is going to take care of that.

 

[scrabbler1]

More updates: I received the $1,400 check last week. And the IRS finally processed my 2019 return!