But when it comes to taxes and stimulus, there are so many questions. And 7 On Your Side is here to clear up the confusion.
The most common question we receive is, “If I haven’t filed my taxes for 2020, will I still receive my check?” “
The answer is yes. We’re in the middle of tax filing season, so don’t worry. The IRS will use your last tax return to determine how much you are eligible to receive.
If you made less this year during the pandemic and qualify for a larger check, you will have the option to adjust your income and get the rest of your money later this year after you file your 2020 return.
“You actually have two chances this time around to get your money back,” said Julia Glum, editor of Money.com. “There will be the additional payment determination date. It will happen this summer and then next year, on your taxes, you can claim a recovery refund credit.”
You will need to file your return within 90 days of the tax deadline, which has just been extended to May 17.
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The next popular question is, “Can my stimulus check be garnished for unpaid debts?” “
The answer is yes and no.
New checks cannot be entered to repay taxes, child support, or outstanding student loans. But unlike the last check for $ 600, this latest round is not protected against debt collectors to pay off overdue credit card debts or medical bills – provided there is a judgment against it first. you.
“Debt collectors can take it, they can take it,” Glum said. “Your bank can kind of take parts out of it to pay the fees if you have an overdrawn account or something. Private debt collectors are probably a little more aggressive in taking your stimulus payments.”
New Jersey Gov. Phil Murphy on Wednesday announced good news on Twitter for residents of the state who may be targets of debt collectors.
NEW: We have secured the support of 49 banks and credit unions to protect US Resident Rescue Plan payments from garnishment.
The American bailout is for the American people – not for the banks and creditors.
– Governor Phil Murphy (@GovMurphy) March 24, 2021
“We have enlisted the support of 49 banks and credit unions to protect US Resident bailout payments from garnishment,” Murphy said. “The American bailout is for the American people – not for the banks and the creditors.”
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People also want to know if their check is considered taxable income. The answer is no, you will not be taxed on your stimulus money. Also, a direct payment you receive this year will not reduce your tax refund in 2021 or increase the amount you owe.
The exception is if you get stimulus money and claim a recovery refund credit on your federal tax returns. The IRS will first collect any back taxes you owe, and then give you the leftovers.
A family of four could get up to $ 5,000 with the latest round of stimulus, the most generous cash help yet, so what should you do with it? You can pay off your debt by saving on interest. You can build an emergency fund or put the money into a tax-efficient 529 plan to help save for your children’s college education.
Click here more from Julia Glum on the latest batch of stimulus payments.
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