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The 2020 Stimulus and Your Taxes Thumbnail

The 2020 Stimulus and Your Taxes


Article by Kaylee Wagner

Photo by Kelly Sikkema on Unsplash

It’s that time of year again – Tax Season!  The year 2020 was unforgettable and provided its challenges for sure and it is no different with 2020 tax returns. On your 2020 return, you will need to report both the stimulus received in both 2020 and 2021. The 2020 stimulus was sent to eligible individuals in the amount of up to $1,200 per adult for individuals and $500 per child under 17 years old. In 2021 you may also have received up to $600 per adult and up to $600 for each qualifying child. Due to income restrictions, the amount received may have varied.

As a part of the tax preparation process, your preparer will need to know how much, if any, you received in stimulus payments from the federal government. You may have received these funds via direct deposit, debit card, or paper check. These payments are not taxable but must be reported correctly on your tax return.

Some individuals received a Form 1444 that contains the information needed for your preparer. Unfortunately, some individuals received both, one or did not receive the form at all so there can be some difficulty in providing this document to your preparer. Since we are not sure whether additional documentation will be sent out from the federal government to people to verify the total amount they received there may be some research you will need to do to find this information. This is especially true if your income or amount of dependents affected the amount you and your spouse were eligible to receive.

The good news is If you know exactly what you received the only thing you need to do is let your tax preparer know the amount received, or that you were ineligible.

For those of you not sure or who never received a stimulus and think you should have, we want to make you aware of a resource to help gather this information. If you go to the IRS Website you will be able to get a transcript that will tell you the information needed. You will need to either create a login or choose to receive this information by mail. Once you log in, you will be asked why you are looking for the information and can select "federal tax" as your answer. Once you are in, you will see the "Account Transcript" section and simply click on 2020 and it will provide you the information you need. In the IRS system, the stimulus payments are referred to as Tax Relief Credits. 

We hope this guide helps you locate this information and takes a bit of the stress out of filing your 2020 tax return.

Source:

https://www.irs.gov/individuals/get-transcript 

https://home.treasury.gov/policy-issues/cares/assistance-for-american-workers-and-families