Stimulus Credit On 2020 Tax Return

The irs said it ll start processing 2020 tax returns on feb.

Stimulus credit on 2020 tax return. 12 and federal tax. Depending on your personal tax situation the recovery rebate credit for your missing stimulus money would either reduce the total amount you owe to the irs or give you a larger tax refund. The irs will use your 2020 income to determine your eligibility for a payment which is technically a tax credit.

If you re overpaid you don t have to pay it back. You ll file for the credit when you do your federal tax returns this year. Both the first stimulus check and the second stimulus check are an advance on a temporary 2020 tax credit.

Because the recovery rebate credit will be based on 2020 adjusted gross income it s worth checking to see if your payment eligibility changes from the past stimulus payments which were based on. If you re underpaid based on your 2020 income you may receive more tax credit when you file your 2020 taxes. The 2020 tax return has a specific line for you to claim the stimulus money.

The stimulus check will be paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount. Unlike a tax deduction which reduces your taxable income and therefore your tax payment a tax credit reduces the amount of tax you owe dollar for dollar. But because of the urgency of the situation the irs was directed to get us that money asap using information from our 2018 or 2019 returns.

You may be able to claim the recovery rebate credit. The credit will be applied to your 2020 tax bill and may result in a refund. It s line 30 and it reads recovery rebate credit.

And if you didn t qualify for a check based on your past tax return you could get stimulus money if you file a tax return for 2020 that shows you re eligible. The irs calls this credit the recovery rebate credit.