25 days ago
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With tax season entering the final stretch ahead of the Internal Revenue Service’s (IRS) May 17 deadline, Americans who received stimulus checks worth up to $1,200 and $600 from the federal government last year may be wondering if Uncle Sam will be taking a cut come Tax Day.
“The simple answer is ‘no’,” Mark Steber, chief tax information officer at Jackson Hewitt, tells CNBC Make It. “None of the stimulus payments are taxable.”
The IRS already has records of the stimulus checks in its system, so taxpayers who are certain that they received the stimulus payments they were due don’t have to take any additional action, Steber says.
“If you and your family got all your money, [filing] is a non-issue,” he says. “You have nothing to worry about whatsoever.”
Where it can get tricky, however, is when taxpayers don’t know this and report the stimulus checks as income, Steber says.
If you accidentally listed your checks as income, you will pay more in taxes when filing your return and will eventually have to receive a refund from the IRS. There’s no guarantee the IRS will catch your mistake for you when processing your 2020 return, Steber says.
Filers who have yet to receive their stimulus payments from last year or did not receive the full amount they believe they were owed can claim the 2020 Recovery Rebate Credit on their tax return.
The IRS also announced that eligible individuals who already filed their taxes before the IRS issued renewed guidance will begin receiving automatic refunds on the taxes they paid on unemployment insurance beginning next month.