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April 11, 2021
Question

Stimulus check

  • April 11, 2021
  • 1 reply
  • 0 views

I am in the middle of filing the tax return for year 2020 via Turbo Tax. We have never received 1st and 2nd stimulus checks so far. Per my understanding, the amount of the 1st and 2nd stimulus checks are based on the income of year 2019 instead of 2020. Since our 2019 house income is lower than 2020,  we should be eligible for the full amount of $3600 (couple filing joint, ($1200+$600)x2 ). But the calculation from Turbo Tax software seems based on the house income of 2020, we have been credited  much less amount than what we should have.  Wondering if you have any advise before we complete the tax filling.

By the way, I have been using the Turbo Tax software for more than 20 years, it has a been a great software! 

1 reply

Employee
April 11, 2021

Sorry---you do not understand the eligibility criteria.  The first and second EIP checks were sent out in a hurry so the IRS used 2018or 2019 returns to issue them.   If you received checks based on the income on a 2018 or 2019 return you do not have to pay it back.

 

But the EIP payments were an advance based on your 2020 income.   If you are now seeking the recovery rebate credit, those stimulus amounts are controlled by your 2020 income---not 2019.   The IRS is not going to go backwards now and use 2019's income to send you stimulus checks.

 

The eligibility for the 1st and 2nd checks per the IRS:

 

A1. Generally, if you are a U.S. citizen or U.S. resident alien, you will receive an Economic Impact Payment of $1,200  ($2,400  for a joint return) if you (and your spouse if filing a joint return)  are not a dependent of another taxpayer and have a Social Security number valid for employment and your adjusted gross income (AGI) does not exceed:

  • $150,000  if married and filing a joint return
  • $112,500 if filing as  head of household or
  • $75,000  for eligible individuals using any other filing status
    Your payment will be reduced by 5% of  the amount by which your AGI exceeds the applicable threshold above.

You are not eligible for a payment if any of the following apply to you:

  • You may be claimed as a dependent on another taxpayer’s return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).
  • You do not have a Social Security number that is valid for employment.
  • You are a nonresident alien.
    The following are also not eligible: a deceased individual or an estate or trust.

 

If your 2020 income is too high then you receive a phased out amount or maybe nothing at all depending on your 2020 income.

 

The third stimulus has its own criteria, and is not entered anywhere on your 2020 return.

 

 

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**