Now that the Pandemic Relief Bill has been signed into law, the two top questions are how much you will get and when. Basically –
Eligible taxpayers and dependents get $600 each.
While some lucky people already are receiving their stimulus checks, most of us will have to wait until at least mid-January before the money is direct deposited into your bank account, longer if the check must be mailed.
Those are the basics. Like every federal law, it’s complicated.
The bill also extends expanded $300 unemployment benefits and a moratorium on evictions for those unable to pay the rent. It also includes money to help states with Covid vaccine distribution, and funds the government to avoid a shutdown.
Note that we are not accountants or tax lawyers. We are just sharing information that is available publicly in news media.
Who Qualifies for a Stimulus Check?
You must have a Social Security number to receive a stimulus check.
The amount starts at $600 and will be gradually reduced to zero if you’re single, married filing a separate tax return, or a qualifying widow(er) with a 2019 adjusted gross income (AGI) more than $75,000.
The amount of the check will be phased out, and gradually reduced to zero, if you’re married (or a surviving spouse) and file a joint tax return, and your AGI exceeds $150,000.
If you claim the head-of-household filing status on your tax return, your payment will be reduced if your AGI tops $112,500.
Parents also get $600 for each child who qualifies for the child tax credit (they must be 16 years old or younger). So a family of four can get $2,400.
Kiplinger has a handy second stimulus check calculator to help you figure out how much you may get from your stimulus check.
Is the Stimulus Check Taxable?
The stimulus payment is not taxable income. You will not owe taxes on this money.
Also, a stimulus check is separate from your tax refund. If you’re due a tax refund, you will still get that if you filed your return.
The IRS is working simultaneously on tax returns and stimulus checks, so one or the other – or both – could be delayed.
You can be eligible for a stimulus payment whether you’re employed full time, part time, self-employed, unemployed or retired.
The payment this time is $600 a person, half of the amount of the first stimulus check in April 2020.
How and When Do Stimulus Checks Arrive?
The checks were supposed to start going out during the last week of December, 2020, but the one week delay by President Trump in signing the measure into law also means the checks will be delayed.
If the IRS has your bank account information already, from a tax payment or tax refund, you should get your stimulus check pretty quickly.
If you have a direct deposit account with a bank, including for Social Security payments, the IRS will deposit the stimulus check directly into that account.
Otherwise, it’s a case of “the check’s in the mail.”
This is the official IRS website link to tell you when your stimulus check is being direct deposited in your bank account
What is the Recovery Rebate Credit?
The two stimulus checks are actually advances on the Recovery Rebate Credit.
According to the IRS, eligible individuals can claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR.
These forms can also be used by people who are not normally required to file tax returns but are eligible for the credit.
If you’re eligible, and did not receive the stimulus checks, or you didn’t receive the full amount, you should be able to claim all or part of the Recovery Rebate Credit when you do your 2020 tax return.
Basically, the stimulus checks are based on your 2019 tax return, whereas the Recovery Rebate Credit is based on your 2020 tax return information.
if you were claimed as someone’s dependent in 2019, you were not eligible to receive a stimulus check.
But if you were not claimed as a dependent in 2020, you should be eligible for the Recovery Rebate Credit.
If you did receive one or more stimulus checks in 2020, you will need to deduct the amount of those checks from the Recovery Rebate Credit on your 2020 tax return, due April 15, 2021.
Just as with the stimulus checks, the Recovery Rebate Credit gets phased out if your AGI exceeds certain amounts.
Read the official information from the IRS about the Recovery Rebate Credit, and consult a tax professional with any questions.
Scammers come out of the woodwork when they smell money.
Seniors and those living alone are especially vulnerable to money scams.
Beware of suspicious communication from anyone claiming to be involved with processing stimulus checks.
The federal government will not call or email you or reach out via social media, so any outreach like this is a scam.
- Don’t reply to emails.
- Hang up on phone calls.
- And never share any personal information or send money.
Thanks to sister website Triangle on the Cheap for research assistance with this article.
NYCOTC Editor Evelyn Kanter also is the author of several NYC and Hudson Valley guidebooks, including my latest, 100 Things to Do in NYC Before You Die.
Purchase autographed copies by emailing email@example.com
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