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The last of the $ 600 stimulus checks were sent out by the IRS, so you should have got yours by now. But what if your checks never arrived? And how can you claim the funds as a tax break? Do you have to pay taxes on your stimulus checks? Here’s what you need to know.
I still haven’t received my stimulus payment. How do i get it?
The IRS Precautions that there might still be some $ 600 checks in the mail, and this is especially true for any mail that is forwarded to a different address. If so, you may want to pause filing your taxes a little longer. Otherwise, you’ll want to claim the first check for $ 1400 or the second check for $ 600 as a discount on your tax return (i.e. if you qualify for them).
Use tax software to do this and look for the “Recovery Rebate Credit” option on your return (if you are making less than $ 72,000, use that IRS Free File Program At no cost). However, if you manually submit or want a more detailed explanation of how to enter this discount on your Form 1040 or Form 1040-SR, Check out this detailed walkthrough video.
However, this has one limitation. If you have received a notice from the IRS confirming that checks have been sent or deposited – either from a letter or as a status in their online status Receive my payment Tool – then the IRS recommends that you initiate a Payment process. This tool allows you to confirm with the IRS that the checks were lost, stolen, or destroyed. Before you do, however, follow these guidelines to ensure that there has been enough time since the IRS status confirmation date:
- Five days after a direct transfer.
- Four weeks since the check was mailed to a standard address.
- Six weeks since the check was mailed to a forwarding address.
- Nine weeks since the check was mailed to a foreign address.
The IRS will respond with the next steps, then the check will be reversed so you can claim the discount as part of your taxes (since checks are not reissued). Unfortunately, the tracking process can take up to eight weeks, and it seems necessary. If you ignore the payment tracking tool and claim the discount on your tax return, the IRS may mistakenly decide that you are not eligible for the discount.
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So if you file your 2020 tax return before your tracing is complete, the IRS recommends excluding the payment amount on lines 16 or 19 of the Restoration Discount Credit worksheet. If so, you need to get the money back on your 2021 tax return. It’s not ideal, to say the least.
Do I have to pay tax on the Stimulus Cash Checks?
Not nationwide (Oregon imposed a taxhowever) because the Stimulus payments don’t count as income, won’t be taxed, or reduce your tax refund when you file your 2020 tax return this year. The payment also does not count as income to determine if you are eligible for government assistance or benefit programs.
The The Internal Revenue Service can reuse the economic funds for unpaid maintenance for the first check. The second round of checks can also be used for maintenance purposes along with unpaid student loans and some federal or state taxes.
Will the timing of my tax return affect my third stimulus review?
Oddly enough, yes, due to a timing issue. Since the relief laws are expected to be passed before the end of the tax season, not all individuals have filed a tax return for the 2020 tax year. In this case, the IRS will have to cut checks based on your gross annual income in 2019 or 2020 – depending on what they have available. In that case, if your 2020 income was lower than 2019, filing early to maximize your returns. Conversely, if you earned less in 2019, you may want to wait until later in March for the checks to be calculated and dispatched. For more informations, Check out this Lifehacker post.
This story was updated on February 19, 2021 to reflect that stimulus checks are taxed in Oregon, but not at the federal level.