How Do Your Stimulus Payments Affect Your Taxes?
Most Americans received stimulus payments in April and December, and most Americans are getting ready to do their income tax filings. And at least a few of these people are worried that they now have to pay taxes on that money. After all, some stimulus programs in the past have been taxable.
See: The Stimulus Check Secret You Need to Know Before You File Your 2020 Taxes
Find: Never Got Your Stimulus Check? Claim It on Your Taxes
But guess what? The stimulus payments are not taxable income. They are structured as tax rebates, so they are neutral to your income tax filings. Ignore the stimulus and do your taxes as usual.
If you did not receive your stimulus check, or if you were entitled to more than you received, then you can claim the difference on line 30 of your 1040.
See: Surprising Unemployment Tax Tips
Find: 7 Things You Need to Know When Filing Your Tax Return This Year
Certain other stimulus benefits have taxable effects. For example, if you collected unemployment insurance, the increased benefits are taxable, and your state will send you a form 1099-G to use in your tax reporting.
Also, if your employer deferred your payroll tax contributions in the last four months of 2020, that money will have to be repaid at tax time.
Of course, taxes will probably go up in the future to cover the stimulus. For now, you are in the clear.
More From GOBankingRates:
These Are the Best Banks of 2021 – Did Yours Make the Cut?
36 Ways To Save For Your Emergency Fund and Any Unexpected Situations
Top 100 Banks Leading the U.S. in 2021
25 Things You Should Always Do Before Buying a Used Car
This article originally appeared on GOBankingRates.com: How Do Your Stimulus Payments Affect Your Taxes?
Source: Read Full Article