2020 taxes: Do you owe taxes on stimulus checks or unemployment?
Because of the coronavirus pandemic, 2020 may be a tax year like no other. Here are answers to some of your top questions.
Staff video, USA TODAY
President Biden signed The American Rescue Plan into law on March 11. This authorized a third round of stimulus checks for many individuals and families in the United States. In fact, a third stimulus check may have already been deposited in your bank account. But are you eligible for more money to be sent your way?
Now that many more Americans have filed their 2020 tax returns, the IRS is finding that they owe more money to some tax filers. That’s because the IRS used the information from the previous year’s returns for the payments, which may have resulted in lower check amounts for some people. Keep reading to see if you’re eligible for a “plus-up” stimulus check.
Who’s eligible for additional checks?
When the IRS acted quickly to send out the third round of stimulus checks, it relied on information from the most recent tax returns that were filed. For many people, that was their 2019 tax return. Now that more individuals and families have submitted their 2020 tax returns, they may be owed more money, as recently filed tax returns may reflect life changes.
From stimulus checks to Tax Day 2021: Answers to your questions about IRS changes, COVID relief and more
The IRS is sending out additional checks to get people the money they are owed — what it calls “plus-up” payments. You may be wondering if you should expect another check from the IRS.
Here’s a look at who may be eligible for a “plus-up” stimulus check payment:
- People with income changes: If the income listed on your 2020 tax return is different than what was listed on your 2019 tax return, you may be eligible for another check. For example, someone may have had a 2019 income that was too high to receive the most recent round of checks, but their 2020 income is lower and now qualifies.
- People who had a child or added a dependant: If the child or dependant wasn’t listed on your 2019 tax return but now is listed on your 2020 tax return, you may be eligible for another check. Many families had a child after filing their 2019 tax returns.
If either of these situations applies to you, you’ll want to keep an eye out for your “plus-up” check. These payments are already starting to be sent out.
The pandemic has made life more challenging for many, especially when it comes to financial matters. If you’re still struggling, check out our personal finance guide for helpful financial tips. There are coronavirus resources available that can help you better navigate this difficult time.
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