The House of Representatives passed theFriday evening, bringing a closer to reality. However, difficulties could arise as the in the midst of — which is . Tax season (unless you ), which means Americans will be when the possible arrive.
Due to the merging of tax season and, you likely have many questions. Will your be based on your 2019 or ? Will you have to pay taxes on any of the stimulus checks? What if you didn’t file taxes in 2019 or don’t file a return before the new bill passes? What if your since you last filed?
The mosthelps shed some light on these questions. But until a final bill is passed, we won’t know anything for certain as anything could change between now and when the bill becomes law. We’ll continue to update this story.
Why the next stimulus check could arrive in the midst of tax season
House Speaker Nancy Pelosi said she expects Congress to have a final bill ready for Biden to sign into law by March 14, which is when. If Congress follows that timeline, a during tax season.
This makes things a bit more complicated. For one, the IRS is already including. It also means the IRS will likely use whichever tax return they have on file most recently (more below.)
Will the stimulus check be based on my 2019 or 2020 taxes?
The most recent(PDF) states the IRS would determine your total third stimulus payment based on your , from either your — whichever the IRS has most recently on file at the time of payment.
There may be several implications to this. For example, if you earned more in 2020 than in 2019, but the IRS uses your 2019 return (and gives you more stimulus money than you might be eligible for), you won’t have to return that money (more below).
The IRS is now accepting 2020 tax returns. We recommend filing your taxes as soon as possible for several reasons. The earlier you file, the(you can ) and any on your return. You’ll also have a chance to , or fix any errors, which could .
What will happen if you made more money in 2020 but the IRS uses your 2019 taxes?
Thesays the following:
Taxpayers receiving an advance payment that exceeds their maximum eligible credit based on 2021 tax return information will not be required to repay any amount of the payment to the Treasury. If a taxpayer’s 2021 tax credit exceeds the amount of the advance payment, taxpayers can claim the difference on their 2021 tax returns.
Therefore, if youbased on , but the IRS issued your check based on your 2019 taxes, you could claim the difference a year from now on your 2021 tax return — much like the current for from the first two rounds.
On the other hand, this also means that if you qualify for the full stimulus payment based on your 2019 taxes, but do not qualify based on your 2020 taxes, and if the IRS used your 2019 return, you won’t have to pay the IRS back for that discrepancy.
What to do if your stimulus payment never arrives, or if any money is missing
Once a final bill is approved, if you’re eligible to receive a third stimulus check, but yours never arrives by, or , you’ll likely have to take another step to claim that money. This happened to millions of people during the first and second round of payments for , including IRS errors, out-of-date banking information or and to get the IRS their information.
Much like with the first and second checks, you’ll be able to claim any missing money from the third check owed to you or your dependents during tax season next year, 2022. That’s a long way away. The best thing to do right now to make sure your third check does arrive on time is to, even if you don’t usually have to file one.
For more, check out what we know so far about aand this time around.