Hey, everyone! You know those stimulus payments we’re all supposed to get?
(putting on CPA hat)
PLEASE understand that these are pre-funds. Just like the 2009 stimulus package, the money sent to you represent your own taxes. You’re just getting an advance on your 2020 tax refund.
I’ve just found the actual language of the bill here, thanks to a friend: https://crsreports.congress.gov/product/pdf/IN/IN11282
And a more detailed explanation, now that it’s finalized, at this article:
The above has more details, and indicates there will be an actual credit on the 2020 tax return, so if things don’t change between 2019 and 2020 for your situation, the money you get now SHOULD be a wash with your year end taxes. However, if things change (i.e. you make more money and go above the threshhold, you don’t have as many dependents, etc.) then you would be liable for the difference.
The government is not GIVING us money. They are giving us an advance on our own money. However, we wouldn’t have this money back without this credit passing.
Please plan appropriately so you aren’t caught short in April 2021.
Pre-fund cannot be garnished for things like past student loans or past taxes due. People should get payment even if they had no income in 2018/2019. SSI and SSDI recipients are included. Children over 17 that are counted as dependents on their parents return are not getting a payment.
NOTE: If you are 17 or over and you and your parents have’t filed for 2019, and you’ve earned money in 2019, it MAY be useful to quickly file 2019 as not being a dependent IF it makes sense tax-wise.
This payment does not count against your assets for SSDI measuring purposes.
The government will look at your 2019 income tax return first for data, than 2018 if 2019 is not yet filed.
They need to have either direct deposit or a recent address, make sure they have it.
This is not taxable income.
Unemployment benefits: Apply now if you’ve lost work either as an employee OR as self-employed/gig worker. Each state has different processes for this, but you are eligible immediately without the normal waiting period. Unemployment benefits ARE TAXABLE INCOME – plan accordingly.
Self-employed are now able to apply online for unemployment in NYS, from what I’ve heard. Other states may also be set up now.
(taking off CPA hat)