How the Stimulus Checks Will Affect Your Taxes — And What to Do if You Never Got Yours
Tax season is always a challenge. But this year, with multiple stimulus checks floating around, you may be even more confused and wondering if you need to be doing something different on your tax return. Here’s what you need to know about tax season in a pandemic, whether you got your checks or fear they may be lost, stolen, or destroyed.
Do I need to include anything about my stimulus checks on my tax return?
Since stimulus checks don’t count as income and are not taxable, you don’t have to pay federal taxes on them. Oregon is the only state currently taxing these checks. Instead, the money is a tax credit, meaning it’s not added to your income for the previous year, nor will it be taken out of a future tax refund.
So if you got your stimulus checks A-OK and deposited them, think of it as getting an advanced tax credit instead of having to wait for that money to come from a tax refund later on.
Do I have to factor in the third stimulus check as I file my 2020 taxes?
Congress is still debating the third stimulus payment as part of the latest Covid relief package, but whether or not you get the check will depend on your latest tax returns. While legislation hasn’t passed yet, it’s looking like individuals who made under $75,000, couples who made under $150,000, and heads of household with an income under $112,500 in their most recent tax return are eligible for the latest $1,400 check. “Recent” depends on if the legislation passes before Tax Day (i.e. April 15) or not. If stimulus checks go out sooner than April 15, the latest taxes that any individual has on file (2019 or 2020) when the treasury prints those checks will be the income that the government takes into account.
In that case, if your income fell in 2020 compared to 2019 and you think you may be eligible based on those latest stimulus parameters, file your taxes as soon as possible so that the income you list is “counted” once the government starts factoring in who gets another check. If you made more in 2020, you may want to hold off filing for just a bit.
What do I do if I never got one or either of my checks?
If you’re not sure if your check was lost, destroyed, or stolen and want to see if it’s been cashed, you can use the IRS Get My Payment tool to initiate its Payment Trace software to get a better look at what might’ve happened and what next steps are based on your specific situation.
If you’re missing one or both stimulus checks and they haven’t been cashed, make sure you file a Recovery Rebate Credit with the IRS when you do your taxes. You’ll need to either fill out Form 1040 and Form 1040-SR or follow the instructions for your specific tax preparation software to make sure you get the credit.
Luckily the stimulus checks are pretty straightforward as far as your taxes go, so it shouldn’t be too stressful of a process this spring.
This article originally appeared on our sister site, Woman’s World.
