2021 STIMULUS CHECK FACTS
The 2021 Stimulus Bill has been signed and is official as of December 27, 2020 however there are still many facets of it that have not been finalized such a sif an additional amount will be issued.
I have summarized what is known as of today.
WHAT YEARS TAX RETURN IS IT BASED ON?
- It will be based on the 2019 tax return..IF FILED
- If 2019 is not filed then they base it on the 2018 tax return
- If neither has been filed whether due to neglect or just the fact of no need to file due to income thresholds set out by the IRS then they will go off the Social Security Administration (SSA) income database (every W2, 1099R and SS payment is sent to Social Security Administration every year). SSI income does not count
AMOUNT OF CHECK
The base amount of the check will be (see limitations below):
$ 600 for a single person
$1,200 for a married couple
$ 600 for each dependent under 17 years old as of 1/1/20.
LIMITATIONS ON AMOUNT OF CHECK
- Income limits (based on AGI) are:
Single person - $75,000 (maximum income $99,000)
Head of Household - $112,500 (maximum income $136,500)
Married couple - $150,000 (maximum income $198,000)
**The amount of check is reduced $5 per every $100 of income above the base amount
- If income exceeds maximum then no check will be issued however since it’s based on 2020 income you will be able to possibly obtain the check on your 2020 tax return next year if income meets the limits set forth.
WILL I HAVE TO PAY TAX NEXT YEAR ON THIS CHECK?
No! This check is not taxable on next years return.
WILL CHILD RECEIVE CHECK?
A child over the age of 16 years old will only receive a check if they were not taken as a dependent on the parents return.
If they claim themselves on their return then they will receive the full $600 if the income falls into the limitations section.
WHAT IF BANK ACCOUNT ON RETURN IS CLOSED OR NO BANK ACCOUNT?
The check will be direct deposited into the account noted on the last return filed
If account is inactive then the srtimulus will have to be processed through the 2020 tincome tax return as a Recovery rebate Credit. They will not send out a check at this time
WHEN WILL I RECEIVE CHECK?
The stimulus is supposed to be issued by January 15, 2021 however the IRS has indicated some delays will be expected.