How to get your full COVID stimulus check during tax season?

With congress tightening of eligibility for the third coronavirus stimulus checks, some Americans might want to strategically time their next tax return to get the full $1,400.

The Senate is poised to push through a proposal that cut off any person making more than $80,000 a year of receiving the pandemic relief payments.

As with last year’s stimulus bills, anyone making up to $75,000 a year would get a check for $1,400, but that amount would decrease for those with incomes between $75,000 and $80,000. (Those thresholds double for married couples filing jointly.)

President Biden’s $1.9 trillion bailout package is likely to be approved in the middle of income tax season, which is important because the federal government will determine an individual’s payment amount based on the most recent tax return they have.

Depending on how your financial circumstances changed last year, it may make sense to file your 2020 return before Biden signs the legislation — or wait for the payments to start going out — to collect the full $1,400.

The home version of the stimulus law directs the US Treasury Department to issue the checks based on a taxpayer’s 2020 or 2019 tax return. It is advantageous to have the 2020 tax return quickly in if you lost your job last year or see your income drop for some other reason.

Kamala Harris arrives to break the tie in a procedural vote as the Senate works on Democrats’ $1.9 trillion COVID aid package.
AP/J. Scott Applewhite

Otherwise, the IRS will calculate your payment based on 2019’s yield, which could mean getting less or no money at all if you made more than $75,000 that year. If that happens, you can claim the amount for which you were eligible, but which you have not yet received in your return in 2021.

On the other hand, people whose income has increased in 2020 may want to wait for the IRS to issue a check based on their income in 2019, which could result in a larger payment depending on how much their income has changed.

The incentive legislation indicates that you do not have to repay the difference. But you should not delay it too long, because the deadline for submitting your 2020 return is April 15.

The COVID aid package is expected to be adopted in mid-March.
The COVID aid package is expected to be adopted in mid-March.
Yuri Gripas/Abaca/Bloomberg via Getty Images

Of course, anyone who made more than $80,000 in both 2019 and 2020 is not eligible for a check, regardless of when they file their tax returns.

All of the above depends on when the stimulus package is signed into law. Congress expects to pass the bill by mid-month, and the IRS could potentially begin delivering checks within days of Biden signing it.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *