Does My Stimulus Check Affect My Taxes?

Over the last couple of years, there have been three separate stimulus bills passed to help those financially impacted by coronavirus. 

• April 2020: $1,200 stimulus checks, with $500 for each eligible dependent, were sent out as a part of the CARES Act
• Jan 2021: $600 stimulus checks, with $600 for each eligible dependent, were sent out as a part of the Coronavirus Response and Relief Supplemental Appropriations Act
• March 2021: $1400 stimulus checks, with $1400 for each eligible dependent, were sent out as a part of the American Rescue Plan Act

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? 

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 information do I need about my stimulus checks when I file my taxes? 

When you received each of your stimulus checks, also known as an Economic Impact Payment, you should have received a Notice 1444. The notice has information about your stimulus check and should be kept with your important tax records like your W-2s or 1099s.

It is possible you received more than one Notice 1444 if you received more than one stimulus check payment. For the first stimulus check you should have received a Notice 1444 and for the second stimulus check you should have received a Notice 1444-B. 

When you sit down to file your taxes, these Notice 1444s will be especially helpful if you were eligible, but didn’t receive the first or second stimulus check or received only a portion of it. The notice includes information like the amount you were issued before any offsets in 2020, which you will need to claim the recovery rebate credit to get any additional stimulus dollars you are owed from the first and second stimulus.

For tax year 2021, you should have received a Letter 6475. This letter will have the total amount of your stimulus payment in 2021 (just the third one, you received in 2021). If you didn’t get the full third stimulus amount you were eligible for, then you may be able to claim those dollars through the recovery rebate credit on your 2021 tax return.

This may seem complicated, but don’t worry. TurboTax will guide you through claiming the recovery rebate.

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 for the first and second stimulus payments, you can only claim it as a recovery rebate credit by filing  your 2020 tax return or amending a previously filed 2020 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.

The third stimulus payments under the American Rescue Plan were issued during 2021 after the relief bill was signed into law on March 11, 2021. If you do not receive your third stimulus payment or you only received a partial payment, you will be able to claim more in the form of a recovery rebate credit when you file your tax year 2021 taxes.

If I had a baby in 2021, can I get stimulus money for them when I file my taxes?

If you had a baby in 2021, the IRS did not have information on your new baby when they issued the third  round of stimulus payments based on your latest tax filing (likely 2019 or 2020). 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 2021 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. 

No matter what your situation or how you want to file, TurboTax has you covered. With TurboTax you can do your taxes yourself, get help from an expert along the way or hand them off from start to finish to a dedicated tax expert.

2 responses to “Does My Stimulus Check Affect My Taxes?”

1. 

   If the EIP payments are not taxable why did TurboTax have me enter them on my tax form?

   Reply
   • 

     Hi Brian,

     TurboTax may have asked you about the EIP payments when you were completing your tax return incase you were eligible for a payment but did not receive it or the full amount that you were eligible for.

     Hope this helps.

     Best,
     Katharina Reekmans, EA

     Reply