Eligibility and amounts of the first round of stimulus payments under the CARES Act and the second round of stimulus under the Coronavirus Response and Relief Supplemental Appropriations Act were determined by the IRS and used information from your previous years federal tax filing. But as you start to prepare your taxes this year, you may be wondering, do the stimulus checks affect my taxes? Or do I have to pay taxes on the money from stimulus checks?
What information do I need about my stimulus checks when I file my taxes?
When you received your stimulus checks, also known as an Economic Impact Payment, you should have received a Notice 1444. You should have this Notice 1444 with your important records like your W-2s or 1099s when you sit down and file. The notice has information about your stimulus check. It is especially helpful if you didn’t receive the full stimulus payment or didn’t receive a stimulus for your dependents since you may be able to claim more stimulus in the form of a recovery rebate credit when you file your taxes.
Do I have to pay taxes on the stimulus checks I received?
No. The payments from the stimulus checks are not taxable. The money from the stimulus checks is not considered income and thus taxpayers will not owe taxes on it.
What happens if I received a partial payment or did not receive my stimulus check before I file my taxes?
If you were eligible, but received a partial payment or did not receive a stimulus check, you may be able to claim it as a recovery rebate credit on your tax return. TurboTax will ask simple questions to see if you received your stimulus checks and how much you received in order to see if you’re eligible for the Recovery Rebate Credit.
If I had a baby in 2020, can I get stimulus money for them when I file my taxes?
If you had a baby in 2020, the IRS did not have information on your new baby when they issued stimulus payments based on your latest tax filing (2019 or 2018). Since they didn’t have the information for your new baby you can get the stimulus for your new baby in the form of a recovery rebate credit when you file your taxes.
What if I don’t need to file a tax return and didn’t get my stimulus check?
If you are a “nonfiler” and would otherwise not be required to file a tax return, according to the IRS, you will need to file a Form 1040 or Form 1040-SR to claim stimulus payments if you are eligible in the form of a Recovery Rebate Credit.
Don’t worry about knowing these tax rules. TurboTax will ask you simple questions about you and give you the tax deductions and credits you’re eligible for based on your answers. If you have a simple tax return with no schedules you may be able to file your federal and state taxes for free with TurboTax Free Edition.