Some people are in a panic about the stimulus check that the government is expected to send out to people starting — well, now, actually.
The question on everybody’s minds is: Will This Stimulus Check Affect My 2020 Tax Return.
The short answer is — NO. It will not negatively affect your 2020 tax return.
How is that possible, you ask? The government doesn’t just hand out free money.
Or do they??
Have you heard of the Earned Income Tax Credit? It is basically financial help that the government gives to low-income families, especially those who claim dependents.
According to Forbes, this stimulus check works basically like that tax credit.
The stimulus payment is a unique fully refundable tax credit. Even if you don’t owe a penny of tax, you get the full $1,200 per person provided you don’t earn too much (and you’re not a dependent who is 17 years old or over).Forbes
That means, you will claim it on your taxes, but it is already payed to you in advance, so it just washes out in the end. In other words, you won’t owe money.
Now, there ARE special circumstances where you may actually get MORE of this stimulus check once you file your 2020 tax return.
To be eligible, you must have made MORE than the amount to earn the full credit NOW, and then drastically have a decrease in salary this year. If THAT is the case, you would not get a full check now, but would get the rest when you file your 2020 taxes.
So, bottom line — breathe easy. This will NOT affect your 2020 taxes.
Enjoy your stimulus check, use it to pay bills or save it for a rainy day.