Will You Have To Pay Back Your Stimulus Check?

April 17, 2020

The U.S. government will issue stimulus checks in the amount of $1,200 to individuals and $2,400 to couples in the wake of the coronavirus. And while the checks provide some relief to those dealing with temporary layoffs and other financial problems due to COVID-19, many are wondering if they will have to pay the checks back once businesses reopen. Review what your Encino tax consultants want you to know about paying the stimulus check back to help manage your finances more efficiently. 

The Checks Are Not Taxed

The checks, which will go out to 80 million Americans via direct deposit or mail, are not subject to federal taxation. The one-time payments resulting from the CARES Act function more as tax refunds and are referred to as “recovery rebates” by the government. However, the rebate does impact tax liability in light of financial status, which can mean smaller refunds for the 2021 tax year. 

You Don’t Have To Pay The Check Back

Since the rebates technically act as early tax refunds for the 2020 tax season, they do not have to be paid back the following tax season. If your 2020 adjusted gross income (AGI) calls for a larger credit than what you will soon enjoy from the federal government, you will receive the difference as part of your 2020 refund. 

There Nothing You Have To Do To Obtain The Check (Probably)

Your Los Angeles accounting experts emphasize that if you filed tax returns for the 2018 and 2019 tax years, you can expect your stimulus check. If the IRS has your direct deposit information, you will see the money in your account soon, otherwise your check will be delivered by mail in the coming months. The only way you have to do anything to receive your refund is if you did not file returns because of low income status. Simply enter your financial information through an IRS affiliate site to get your check. You may also want to update your information if you desire direct deposit over a check in the mail. 

For more assistance from your Los Angeles accountant service, please contact Wallace & Associates today.