When the Coronavirus outbreak first began in the early months of 2020, the United States government made a quick decision to give economic impact payments, also referred to as stimulus payments or stimulus checks, to eligible Americans. The purpose of this decision was to mitigate some of the extreme consequences of the virus for businesses, families, and individuals.
Taxpayers who filed in 2018 and 2019 were assessed by the Internal Revenue Service (IRS), and some were given a check to offset some of the worst economic impacts of the pandemic. Whether by losing a job due to nationwide closures, difficulties with rent and other payments, or unexpected healthcare costs, many Americans received a check in amounts up to $1,200.
However, now that states are beginning to lift stay-at-home orders and businesses are opening, many who received stimulus checks are wondering how the economic impact payment will affect their taxes in the coming year. Those who receive other benefits such as Supplemental Security Income (SSI) fear that the stimulus check will impact their eligibility for benefits.
What is the Coronavirus Economic Impact Check?
With business shutdowns across the country and life as many Americans knew it put on hold from a global pandemic, the government voted on a recovery rebate to alleviate some of the financial burdens brought on by the virus.
The stimulus check is technically an advanced tax credit that the IRS sent to offset 2020 federal income taxes. Federal officials made the important distinction that this check is separate from other government benefits like unemployment and SSI, and it will not affect the amount that is awarded to eligible SSI recipients.
As of June 3, the IRS announced that it sent out more than 159 million stimulus checks to qualifying Americans. To receive a stimulus check, you must have a valid Social Security number, filed taxes in 2018 or 2019, and not be a dependent on another person’s taxes. Individuals must earn less than $99,000 per year – or less than $198,000 for married couples – to qualify for economic relief.
For most qualifying Americans, the process to enroll for this stimulus check was automatic, with only a few exceptions. The IRS delivered payments to most people through direct deposit. For those without this information in the database, the IRS mailed paper checks.
How Will it Impact My 2020 Taxes?
Thankfully for many, the stimulus payment from the government will not affect their tax refund in the coming year. Instead of having the money deducted from the taxes you owe during the next tax season, the amount is being given to eligible citizens now.
The most important part of the Coronavirus check is that the payment is not considered income, therefore recipients will not have to pay taxes on it. It will not reduce refunds in the future nor will it increase the amount that person owes in taxes. For those that rely on government assistance or benefit programs, the economic impact payment will also not affect eligibility for these programs.
While the stimulus check was helpful for many, it is unclear how the government will continue to adapt to the changing landscape of the COVID-19 pandemic. Some states are beginning to reopen as their infection rates decline, while others are dealing with spikes in the number of cases as a result of relaxed restrictions on public spaces and gatherings. Some are curious about the possibility of further economic assistance checks and how the government will aid in economic recovery in the coming weeks and months.
However, one thing is clear. The amount you receive in stimulus checks is not going to impact your taxes for the 2020 fiscal year or your tax return next year. For those pursuing additional Social Security disability benefits during this time, these checks will not be counted against their eligibility or income qualifications.
Still Have Questions? Talk to an Attorney Today
There are still many uncertainties in life as the Coronavirus continues to spread. Much of what was considered normal life has changed to protect people from the spread of infection. As businesses start to reopen and people try to return to normal life, you may still have questions.
With years of experience in Social Security disability matters, the Khaki Law Firm can help you understand your rights in terms of tax returns and disability benefits. Our team is available to answer your questions and discuss your situation. Contact our firm today to learn more.