Tax Week: Stimulus Checks and Your Tax Return
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What is the main topic discussed in this episode?
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Here's your Money Briefing from Monday, March 8th. I'm J.R.
What upcoming tax-season changes should I know about this year?
Whelan for The Wall Street Journal. Tax season is just about here, so all this week we've got a special series of episodes for you. Our tax reporters Richard Rubin and Laura Saunders will be answering important questions about how to prepare your taxes after a year in which the pandemic wreaked havoc with so many people's personal finances.
So, for example, if you have gotten, you got partial payments, you missed one of the payments, and for whatever reason, either income or family size, you now qualify for more money based on your 2020 income, then you do have to go through some steps in order to get the rest of that money.
Today, Rich examines stimulus checks and your tax return, including what happens if you feel you didn't get enough money from the government last year. Rich will also explain the tax liability status of stimulus money and why filing your 2020 taxes sooner than later could put more money in your pocket. That's after the break.
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Is federal stimulus money from 2020 taxable on my return?
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Unlike last year when we had until the summer to file our taxes, the filing deadline this year is back to April 15th. But for many people, not procrastinating could mean some extra money from the stimulus package working its way through Congress. Our tax reporter Richard Rubin is here to tackle that and other stimulus issues related to your tax return. Rich, thanks for being with us. Oh, happy to be here. So, Rich, let's get an important question out of the way. Is any of the stimulus money people got last year taxable?
No, this is not taxable income. You can really think of it as like just like a tax refund that you get is not taxable income. These payments from the federal government are not, for federal purposes, taxable income.
Okay, so does that mean when people are filling out their tax returns this year, they don't have to list the stimulus money they got last year?
It depends. If you got the full amount and you're not entitled to any more, then you don't have to do anything. The only time that it really shows up on the tax return is if you didn't get everything that you are entitled to based on your 2020 income.
When do I need to report stimulus payments on my 2020 tax return?
So, for example, if you have gotten you got partial payments, you missed one of the payments and for whatever reason, either income or family size, you now qualify for more money based on your 2020 income. Then you do have to go through some steps in order to get the rest of that money.
Okay. And if you have to do that, it's all laid out for you on your tax return?
So what you need to do, it's line 30. It's called the recovery rebate credit, and there's a worksheet for it. And either your tax preparer or the software will probably walk you through that pretty straightforwardly. But you basically need the information from the letters that you got from the IRS or basically saying, I didn't get anything.
How do I claim missing stimulus payments using the Recovery Rebate Credit (line 30)?
And then you'll basically need to show that you qualify. Again, it's based on your 2020 income.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–0:38
2
What upcoming tax-season changes should I know about this year?
0:38–1:56
3
Is federal stimulus money from 2020 taxable on my return?
1:56–3:09
4
When do I need to report stimulus payments on my 2020 tax return?
3:09–3:49
5
How do I claim missing stimulus payments using the Recovery Rebate Credit (line 30)?
3:49–7:26
6
Which common situations (new baby or income drop) make me eligible for more stimulus money?
7:26–9:23
Speakers
3 identifiedMore from WSJ Your Money Briefing
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