corona checks as a rebate on 2020 taxes?

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denali98
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corona checks as a rebate on 2020 taxes?

Post by denali98 »

Hi, everybody:
Do I have this right about the Corona Rescue Package?
The rebate checks are a pre-payment of a tax credit “really given” for tax year 2020.
So, it is your 2020 AGI that qualifies you for this rebate.
The use of 2018 and 2019 AGI are just placeholders, allowing an estimate and early payment.
If your 2020 AGI is within the zone, even if your 2018/2019 AGI was too high, you will take your tax credit on your 2020 tax form.
Thank you for clarifying this for me.
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whodidntante
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Re: corona checks as a rebate on 2020 taxes?

Post by whodidntante »

As of now there is no law for this.
OnceARunner
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Re: corona checks as a rebate on 2020 taxes?

Post by OnceARunner »

I believe your understanding is correct. Here is a link and quote from a Washington Post article on this subject:
What happens to people who earned too much in 2018 and 2019 but now lost their job? This is a really tough situation. Unfortunately, these workers are not eligible for $1,200 checks right away. They would get the rebate when they file their 2020 taxes next year. Treasury may create a program to get these people money sooner, but nothing has been announced yet.

What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.
https://www.washingtonpost.com/graphics ... alculator/
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Re: corona checks as a rebate on 2020 taxes? [discussion of proposed legislation not permitted]

Post by LadyGeek »

I retitled the thread. This thread is now locked. Please hold off asking stimulus questions until the bill is signed into law. From: Political comments and proposed tax plan remain off-topic
LadyGeek wrote: Sun Nov 20, 2016 12:01 pm Speculation about future legislation is prohibited by forum policy, see Unacceptable Topics:
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This forum is focused on investing that is directly actionable to personal investors. We don't hold debates on conjecture.

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Re: corona checks as a rebate on 2020 taxes?

Post by LadyGeek »

The bill has been signed into law. This thread is reopened to continue the discussion.

(Thread title changed back.)
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cherijoh
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Re: corona checks as a rebate on 2020 taxes?

Post by cherijoh »

OnceARunner wrote: Fri Mar 27, 2020 1:01 pm I believe your understanding is correct. Here is a link and quote from a Washington Post article on this subject:
What happens to people who earned too much in 2018 and 2019 but now lost their job? This is a really tough situation. Unfortunately, these workers are not eligible for $1,200 checks right away. They would get the rebate when they file their 2020 taxes next year. Treasury may create a program to get these people money sooner, but nothing has been announced yet.

What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.
https://www.washingtonpost.com/graphics ... alculator/
Another point is that people who have linked their checking account to the IRS site (to either make a draft to pay taxes or get their refund as a direct deposit) will get their money quicker than those who have not. I imagine it will work the same way for SS recipients since direct deposit is the norm (if not outright required). People who don't have a bank account or haven't linked their account with IRS/SS may have to wait some time for a paper check to be printed.
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Phineas J. Whoopee
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Re: corona checks as a rebate on 2020 taxes?

Post by Phineas J. Whoopee »

It's a 2020 tax credit, dealt with on one's 2020 tax return filed in 2021, and the legislation says to pay it in advance.
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Re: corona checks as a rebate on 2020 taxes?

Post by tbone555 »

Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
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nps
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

tbone555 wrote: Fri Mar 27, 2020 7:06 pm Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
Yes
kjvmartin
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Re: corona checks as a rebate on 2020 taxes?

Post by kjvmartin »

Glad I filed 2019 super early, as we have an extra kid on that return! Hopefully they pick that up.
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Re: corona checks as a rebate on 2020 taxes?

Post by tbone555 »

Crazy. But will do.
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Re: corona checks as a rebate on 2020 taxes?

Post by cowdogman »

nps wrote: Fri Mar 27, 2020 7:08 pm
tbone555 wrote: Fri Mar 27, 2020 7:06 pm Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
Yes
Sort of. In terms of getting a higher check, yes. But when you file for 2020 in early 2021, you will calculate the amount you're entitled to based on 2020 income and then either get an additional tax credit or have to "pay back" part of the stimulus (in the form of a higher tax bill for 2020).

I don't qualify for a check, but I may qualify for the credit on my 2020 taxes.
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Kenkat
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Re: corona checks as a rebate on 2020 taxes?

Post by Kenkat »

What about a case where someone was a full time student over 17 in 2019, with earned income but claimed as a dependent on their parents’ return in 2019 in order to claim the AOTC? My understanding is that they would not receive anything from the new stimulus bill. But if they were not claimed as a dependent in 2020 (since no longer a full time student), would they receive the $1200 when 2020 taxes were filed instead?
Last edited by Kenkat on Fri Mar 27, 2020 7:52 pm, edited 1 time in total.
Alan S.
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Re: corona checks as a rebate on 2020 taxes?

Post by Alan S. »

tbone555 wrote: Fri Mar 27, 2020 7:16 pm Crazy. But will do.
Yes, what you should do is wait until your rebate check actually lands in your bank account before filing 2019. Not likely that you get the rebate before May, maybe late May.
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nps
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

cowdogman wrote: Fri Mar 27, 2020 7:33 pm
nps wrote: Fri Mar 27, 2020 7:08 pm
tbone555 wrote: Fri Mar 27, 2020 7:06 pm Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
Yes
Sort of. In terms of getting a higher check, yes. But when you file for 2020 in early 2021, you will calculate the amount you're entitled to based on 2020 income and then either get an additional tax credit or have to "pay back" part of the stimulus (in the form of a higher tax bill for 2020).
That is not correct. There is no pay back or higher tax bill in 2020.
Ron Ronnerson
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Re: corona checks as a rebate on 2020 taxes?

Post by Ron Ronnerson »

nps wrote: Fri Mar 27, 2020 7:40 pm
cowdogman wrote: Fri Mar 27, 2020 7:33 pm
nps wrote: Fri Mar 27, 2020 7:08 pm
tbone555 wrote: Fri Mar 27, 2020 7:06 pm Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
Yes
Sort of. In terms of getting a higher check, yes. But when you file for 2020 in early 2021, you will calculate the amount you're entitled to based on 2020 income and then either get an additional tax credit or have to "pay back" part of the stimulus (in the form of a higher tax bill for 2020).
That is not correct. There is no pay back or higher tax bill in 2020.
This is a paragraph from the Washington Post:
What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.

I have a family member who made too much in 2019 to qualify but did not make too much in 2018. They have cancelled their tax appointment (which was scheduled for April) and now plan to file taxes in the summer. This family member is married with several children so they should get a relatively nice stimulus check due to procrastinating to do their taxes this year.
MotoTrojan
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Re: corona checks as a rebate on 2020 taxes?

Post by MotoTrojan »

So if I filed as single this year and don’t qualify but wife does, will I get an additional $1200 off in 2020 (we both qualify under the married limit)?
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Re: corona checks as a rebate on 2020 taxes?

Post by cowdogman »

Ron Ronnerson wrote: Fri Mar 27, 2020 8:00 pm
nps wrote: Fri Mar 27, 2020 7:40 pm
cowdogman wrote: Fri Mar 27, 2020 7:33 pm
nps wrote: Fri Mar 27, 2020 7:08 pm
tbone555 wrote: Fri Mar 27, 2020 7:06 pm Based on my 2018 AGI my family would get $3300.

Based on my 2019 AGI my family would get $900.

I have not yet filed my 2019 taxes. Based on this article it appears I should wait so as to get the higher payment. Am I correct?

https://www.google.com/amp/s/www.forbes ... yment/amp/
Yes
Sort of. In terms of getting a higher check, yes. But when you file for 2020 in early 2021, you will calculate the amount you're entitled to based on 2020 income and then either get an additional tax credit or have to "pay back" part of the stimulus (in the form of a higher tax bill for 2020).
That is not correct. There is no pay back or higher tax bill in 2020.
This is a paragraph from the Washington Post:
What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.

I have a family member who made too much in 2019 to qualify but did not make too much in 2018. They have cancelled their tax appointment (which was scheduled for April) and now plan to file taxes in the summer. This family member is married with several children so they should get a relatively nice stimulus check due to procrastinating to do their taxes this year.
With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
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Re: corona checks as a rebate on 2020 taxes?

Post by Ron Ronnerson »

cowdogman wrote: Fri Mar 27, 2020 8:32 pm
Ron Ronnerson wrote: Fri Mar 27, 2020 8:00 pm
nps wrote: Fri Mar 27, 2020 7:40 pm
cowdogman wrote: Fri Mar 27, 2020 7:33 pm
nps wrote: Fri Mar 27, 2020 7:08 pm

Yes
Sort of. In terms of getting a higher check, yes. But when you file for 2020 in early 2021, you will calculate the amount you're entitled to based on 2020 income and then either get an additional tax credit or have to "pay back" part of the stimulus (in the form of a higher tax bill for 2020).
That is not correct. There is no pay back or higher tax bill in 2020.
This is a paragraph from the Washington Post:
What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.

I have a family member who made too much in 2019 to qualify but did not make too much in 2018. They have cancelled their tax appointment (which was scheduled for April) and now plan to file taxes in the summer. This family member is married with several children so they should get a relatively nice stimulus check due to procrastinating to do their taxes this year.
With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
This is all new so it’s possible the newspaper has it wrong. I would only perhaps caution on relying too much on logic or sense when it comes to tax policy set by the government. That is not meant as a political comment as I’m not deeming what we have in place as either good or bad. However, just take a careful look at the tax system and decide for yourself whether or not it has certain oddities. Okay, I’ll just say it: it’s plain wacky sometimes.
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Re: corona checks as a rebate on 2020 taxes?

Post by snowman »

Kenkat wrote: Fri Mar 27, 2020 7:34 pm What about a case where someone was a full time student over 17 in 2019, with earned income but claimed as a dependent on their parents’ return in 2019 in order to claim the AOTC? My understanding is that they would not receive anything from the new stimulus bill. But if they were not claimed as a dependent in 2020 (since no longer a full time student), would they receive the $1200 when 2020 taxes were filed instead?
Yes, that's how it's supposed to work. No money now, but assuming they file 2020 taxes NOT as dependent (IRS has rules about dependency that need to be met), they will get credit next spring.
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nps
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
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cowdogman
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Re: corona checks as a rebate on 2020 taxes?

Post by cowdogman »

nps wrote: Fri Mar 27, 2020 9:02 pm
cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
RedClay
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Re: corona checks as a rebate on 2020 taxes?

Post by RedClay »

My 2018 AGI was roughly $150k and my 2019 AGI was a little over $200k (MFJ). I filed my taxes two weeks ago, so my understanding is that I lose out on $2,400 because I filed my taxes too early. Is this correct? I also assume there is no way to retract my 2019 tax return? :oops: :oops:
capran
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Re: corona checks as a rebate on 2020 taxes?

Post by capran »

cowdogman wrote: Fri Mar 27, 2020 9:25 pm
nps wrote: Fri Mar 27, 2020 9:02 pm
cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
I hope those with more experience will figure that out before the end of the year and post definitive info. For 2018 our AGI was 150,031. We have yet to file 2019, as we gave it to a CPA to look over, but it was more like 167k (and the office closed due to it not being an essential service). If I am understanding the argument, we'll get nearly the full amount, less $5 for the 31 over 150k. If we maintained our higher income for 2020 like we did for 2019, and kept our income at the 170k level, then we would need to pay back $1,000. of the $1995. It figures that our government would figure out a way to take back some of their "gift"
simplesauce
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Re: corona checks as a rebate on 2020 taxes?

Post by simplesauce »

RedClay wrote: Fri Mar 27, 2020 9:41 pm My 2018 AGI was roughly $150k and my 2019 AGI was a little over $200k (MFJ). I filed my taxes two weeks ago, so my understanding is that I lose out on $2,400 because I filed my taxes too early. Is this correct? I also assume there is no way to retract my 2019 tax return? :oops: :oops:
I’m in the same boat. I was proactive, and it looks like it cost us! That’s okay. I assume we would have decided to donate the bonus.
RedClay
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Re: corona checks as a rebate on 2020 taxes?

Post by RedClay »

capran wrote: Fri Mar 27, 2020 10:45 pm
cowdogman wrote: Fri Mar 27, 2020 9:25 pm
nps wrote: Fri Mar 27, 2020 9:02 pm
cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
I hope those with more experience will figure that out before the end of the year and post definitive info. For 2018 our AGI was 150,031. We have yet to file 2019, as we gave it to a CPA to look over, but it was more like 167k (and the office closed due to it not being an essential service). If I am understanding the argument, we'll get nearly the full amount, less $5 for the 31 over 150k. If we maintained our higher income for 2020 like we did for 2019, and kept our income at the 170k level, then we would need to pay back $1,000. of the $1995. It figures that our government would figure out a way to take back some of their "gift"
You should wait to file your 2019 tax return until you receive the stimulus check (or later, if you anticipate additional stimulus checks from future legislation). The filing deadline is now July 15. Everything I have read suggests you will not have to pay back any part of the stimulus check.
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WoodSpinner
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Re: corona checks as a rebate on 2020 taxes?

Post by WoodSpinner »

capran wrote: Fri Mar 27, 2020 10:45 pm
cowdogman wrote: Fri Mar 27, 2020 9:25 pm
nps wrote: Fri Mar 27, 2020 9:02 pm
cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
I hope those with more experience will figure that out before the end of the year and post definitive info. For 2018 our AGI was 150,031. We have yet to file 2019, as we gave it to a CPA to look over, but it was more like 167k (and the office closed due to it not being an essential service). If I am understanding the argument, we'll get nearly the full amount, less $5 for the 31 over 150k. If we maintained our higher income for 2020 like we did for 2019, and kept our income at the 170k level, then we would need to pay back $1,000. of the $1995. It figures that our government would figure out a way to take back some of their "gift"
I don’t think there will be any clawback.

See https://www.kitces.com/blog/analyzing-t ... -pandemic/

Good luck and stay safe

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RedClay
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Re: corona checks as a rebate on 2020 taxes?

Post by RedClay »

simplesauce wrote: Fri Mar 27, 2020 10:55 pm
RedClay wrote: Fri Mar 27, 2020 9:41 pm My 2018 AGI was roughly $150k and my 2019 AGI was a little over $200k (MFJ). I filed my taxes two weeks ago, so my understanding is that I lose out on $2,400 because I filed my taxes too early. Is this correct? I also assume there is no way to retract my 2019 tax return? :oops: :oops:
I’m in the same boat. I was proactive, and it looks like it cost us! That’s okay. I assume we would have decided to donate the bonus.
My wife has been laid off and it’s a possibility that I will be laid off shortly as well. If this happens, our 2020 AGI will be well below the $150k threshold and we would receive the $2400 as a credit on our 2020 tax return. I’m not sure if a similar situation applies to you, but something to be aware of. The expanded unemployment of $600 per week should also help bridge the gap.
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WoodSpinner
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Re: corona checks as a rebate on 2020 taxes?

Post by WoodSpinner »

One thing not highlighted though ...

If you used Direct Deposit for 2018 taxes or have moved and your account/address is not valid you might want to file 2019 NOW (assuming you still have eligibility under 2019) rather than wait.

I suspect the phone lines are going to be overwhelmed with folks trying to locate a missing check.

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Iridium
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Re: corona checks as a rebate on 2020 taxes?

Post by Iridium »

MotoTrojan wrote: Fri Mar 27, 2020 8:10 pm So if I filed as single this year and don’t qualify but wife does, will I get an additional $1200 off in 2020 (we both qualify under the married limit)?
Will you be filing a joint tax return?
Will the sum of your incomes be under $150K in 2020?

If the answer to both is yes, then I believe you would get $1200.

P.S. If you are married, you cannot file as single. Your only options are joint or Married Filing Separately. I'm assuming that is what you meant to say, but it isn't uncommon mistake for married folks to try to file as single.
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Re: corona checks as a rebate on 2020 taxes?

Post by MotoTrojan »

Iridium wrote: Fri Mar 27, 2020 11:23 pm
MotoTrojan wrote: Fri Mar 27, 2020 8:10 pm So if I filed as single this year and don’t qualify but wife does, will I get an additional $1200 off in 2020 (we both qualify under the married limit)?
Will you be filing a joint tax return?
Will the sum of your incomes be under $150K in 2020?

If the answer to both is yes, then I believe you would get $1200.

P.S. If you are married, you cannot file as single. Your only options are joint or Married Filing Separately. I'm assuming that is what you meant to say, but it isn't uncommon mistake for married folks to try to file as single.
We were married this year so the current filing used as a proxy for determination of checks was in fact filed as single. Sounds like we can look forward to getting $1200 soon and another $1200 next year, not bad.
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Re: corona checks as a rebate on 2020 taxes?

Post by RedClay »

WoodSpinner wrote: Fri Mar 27, 2020 11:10 pm One thing not highlighted though ...

If you used Direct Deposit for 2018 taxes or have moved and your account/address is not valid you might want to file 2019 NOW (assuming you still have eligibility under 2019) rather than wait.

I suspect the phone lines are going to be overwhelmed with folks trying to locate a missing check.

WoodSpinner
Also, you should file your 2019 return as soon as possible if (1) your 2018 AGI is higher than your 2019 AGI and (2) you are under the threshold amount or in the phaseout range. A lot of interesting considerations related to timing of 2018 and 2019 tax returns. For example, if your 2018 AGI is $200K (MFJ), but your 2019 AGI is $130K, you should file your 2019 tax return now in order to receive the full $2,400. If you wait to file and the IRS uses your 2018 return, you will receive no stimulus check now. However, you may still receive a credit depending on your eventual 2020 AGI.
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nps
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

cowdogman wrote: Fri Mar 27, 2020 9:25 pm
nps wrote: Fri Mar 27, 2020 9:02 pm Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
It does address it. For tax year 2020 there will be a line for the stimulus credit. Let's say your advance rebate now is $1,200 based on most recent return, and in 2020 your income is higher and the credit you qualify for is $300. That $300 is reduced by your prior advance rebate of $1,200. Some people think that is a $900 claw back: $1,200 minus $300 is -$900. However, the law states that the difference cannot be less than zero. So the correct math is:

$300 credit - $1,200 advance rebate = 0 (no additional credit or money owed)
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

capran wrote: Fri Mar 27, 2020 10:45 pm I hope those with more experience will figure that out before the end of the year and post definitive info. For 2018 our AGI was 150,031. We have yet to file 2019, as we gave it to a CPA to look over, but it was more like 167k (and the office closed due to it not being an essential service). If I am understanding the argument, we'll get nearly the full amount, less $5 for the 31 over 150k. If we maintained our higher income for 2020 like we did for 2019, and kept our income at the 170k level, then we would need to pay back $1,000. of the $1995. It figures that our government would figure out a way to take back some of their "gift"
I posted definitive info. You would not need to pay back anything. See my post above.
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sunny_socal
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Re: corona checks as a rebate on 2020 taxes?

Post by sunny_socal »

Great thread! I thought for sure I'd get nothing but it turns out I may get about $1k. :beer
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Re: corona checks as a rebate on 2020 taxes?

Post by Naris »

WoodSpinner wrote: Fri Mar 27, 2020 11:07 pm
capran wrote: Fri Mar 27, 2020 10:45 pm
cowdogman wrote: Fri Mar 27, 2020 9:25 pm
nps wrote: Fri Mar 27, 2020 9:02 pm
cowdogman wrote: Fri Mar 27, 2020 8:32 pm With all due respect to the Washington Post (to which I subscribe), I'm basing my interpretation on the wording in the bill.

The checks are "advance refunds" of a tax credit on 2020 returns. The credit is based on 2020 income. I'm not seeing anywhere in the bill where it says a taxpayer is entitled to keep the advance refund if he was not entitled to a credit based on 2020 AGI, leading me to believe there will be an adjustment in the tax forms for 2020.

Maybe I'm just missing it in the bill? Definitely a possibility.

It would make logical/economic sense for the government to claw the money back if the taxpayer was not eligible based on 2020 AGI--given that Coronavirus struck in 2020.
Look in the bill for the section titled Coordination With Advance Refunds of Credit. The first paragraph states that the 2020 credit shall be reduced by the advance refund being issued now, but not below zero.
Yes, I saw that, but even if the credit is reduced to zero (but not below) that still doesn't address the status of the advance refunds. IOW if the taxpayer is entitled to zero credit based on 2020 AGI then the status of advance refund is still an issue.

A "but not below zero" parenthetical is a poor way of dealing with such a large issue--if that in fact was the intent. But you may be right.
I hope those with more experience will figure that out before the end of the year and post definitive info. For 2018 our AGI was 150,031. We have yet to file 2019, as we gave it to a CPA to look over, but it was more like 167k (and the office closed due to it not being an essential service). If I am understanding the argument, we'll get nearly the full amount, less $5 for the 31 over 150k. If we maintained our higher income for 2020 like we did for 2019, and kept our income at the 170k level, then we would need to pay back $1,000. of the $1995. It figures that our government would figure out a way to take back some of their "gift"
I don’t think there will be any clawback.

See https://www.kitces.com/blog/analyzing-t ... -pandemic/

Good luck and stay safe

WoodSpinner
This article was extremely helpful. Thanks for sharing.

On a policy level, it seems . . . surprising . . . that there won't be any clawback, but it definitely provides another interesting factor for the decision of whether to delay filing one's 2019 taxes until closer to July 2020 if you haven't already filed them.
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Re: corona checks as a rebate on 2020 taxes?

Post by TravelGeek »

Naris wrote: Sat Mar 28, 2020 9:48 am On a policy level, it seems . . . surprising . . . that there won't be any clawback, but it definitely provides another interesting factor for the decision of whether to delay filing one's 2019 taxes until closer to July 2020 if you haven't already filed them.
I think that is probably to avoid negative stories about the government clawing back money (“gifts”) even if it would perhaps be the fair thing to do if they wanted to treat taxpayers equally. Now timing matters and we may see stories about taxpayers getting negatively impacted by diligently filing their 2019 taxes prior to the original 4/15 deadline. Perhaps a result of law makers and their staff not having sufficient time to think through all the consequences, which is somewhat understandable in the current situation.

In our case, 2018 AGI >> 2019 AGI >? 2020 AGI since we FIREd in late 2018. We haven’t filed 2019 yet, so unless I get my act together and deal with it this weekend, we will get nothing now and then something in 2021. Our current spend isn’t limited by available funds, so we don’t need the check now but it is probably still worth getting 2019 filed in case 2020 is significantly higher (very unlikely).
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Re: corona checks as a rebate on 2020 taxes?

Post by the way »

snowman wrote: Fri Mar 27, 2020 9:01 pm
Kenkat wrote: Fri Mar 27, 2020 7:34 pm What about a case where someone was a full time student over 17 in 2019, with earned income but claimed as a dependent on their parents’ return in 2019 in order to claim the AOTC? My understanding is that they would not receive anything from the new stimulus bill. But if they were not claimed as a dependent in 2020 (since no longer a full time student), would they receive the $1200 when 2020 taxes were filed instead?
Yes, that's how it's supposed to work. No money now, but assuming they file 2020 taxes NOT as dependent (IRS has rules about dependency that need to be met), they will get credit next spring.
If someone will be in the phase-out range this year, 75k-99k, I wonder if they should switch from a roth 401k to traditional. That could lower agi by ~15k for the remainder of the year and qualify for more of the credit.

The phase out rate is 5%, so if their tax bracket now is 22%, but turns out to be >27% when the ira is withdrawn/converted, then maybe not such a good idea?
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Re: corona checks as a rebate on 2020 taxes?

Post by RedClay »

the way wrote: Sun Mar 29, 2020 12:05 pm
snowman wrote: Fri Mar 27, 2020 9:01 pm
Kenkat wrote: Fri Mar 27, 2020 7:34 pm What about a case where someone was a full time student over 17 in 2019, with earned income but claimed as a dependent on their parents’ return in 2019 in order to claim the AOTC? My understanding is that they would not receive anything from the new stimulus bill. But if they were not claimed as a dependent in 2020 (since no longer a full time student), would they receive the $1200 when 2020 taxes were filed instead?
Yes, that's how it's supposed to work. No money now, but assuming they file 2020 taxes NOT as dependent (IRS has rules about dependency that need to be met), they will get credit next spring.
If someone will be in the phase-out range this year, 75k-99k, I wonder if they should switch from a roth 401k to traditional. That could lower agi by ~15k for the remainder of the year and qualify for more of the credit.

The phase out rate is 5%, so if their tax bracket now is 22%, but turns out to be >27% when the ira is withdrawn/converted, then maybe not such a good idea?
Yes, that would be a good idea and the general advice is to do traditional 401(k) and Roth IRA in any event. Ways to reduce your AGI include: pre-tax 401k/IRA contributions, HSA contributions, pre-tax premiums for health insurance, dental, vision. Note that this would only be relevant for 2020 if you are in the phaseout range 75k - 99k (single) or above it for your 2018 / 2019 tax returns.
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Re: corona checks as a rebate on 2020 taxes?

Post by Sparky1500 »

On a related topic: For those of us that closely watch our MAGI in order to avoid the ACA cliff, will the stimulus check amount received in 2020 be counted towards our 2020 MAGI?
Last edited by Sparky1500 on Sun Mar 29, 2020 12:22 pm, edited 1 time in total.
Retired August 3, 2018 and very grateful.
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Re: corona checks as a rebate on 2020 taxes?

Post by 8foot7 »

TravelGeek wrote: Sat Mar 28, 2020 10:28 am

I think that is probably to avoid negative stories about the government clawing back money (“gifts”) even if it would perhaps be the fair thing to do if they wanted to treat taxpayers equally. Now timing matters and we may see stories about taxpayers getting negatively impacted by diligently filing their 2019 taxes prior to the original 4/15 deadline. Perhaps a result of law makers and their staff not having sufficient time to think through all the consequences, which is somewhat understandable in the current situation.
This is us, to a tee. 2018 income would have more than qualified us for the full payment ($3,400). 2019 AGI has us out of the ballpark entirely and I filed in early February, so being diligent did not pay off. Folks in our situation who have not yet filed are getting what amounts to free money that they won't have to pay back, while our family gets absolutely nothing.

Frankly, it's unclear to me how that can be allowed to let stand if we are doing this based on tax policy, and I hope when the dust settles a little bit in a few months we can have our legislators work to make sure at least each individual or family that makes the same amount of money received the same amount of stimulus.

I'm more than a little irritated that I've been an adult for the $850 billion TARP bailout and the $1 trillion stimulus here and I haven't gotten a single darn penny from either of them.
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

Sparky1500 wrote: Sun Mar 29, 2020 12:18 pm On a related topic: For those of us that closely watch our MAGI in order to avoid the ACA cliff, will the stimulus check amount received in 2020 be counted towards our 2020 MAGI?
No
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

8foot7 wrote: Sun Mar 29, 2020 12:22 pm I'm more than a little irritated that I've been an adult for the $850 billion TARP bailout and the $1 trillion stimulus here and I haven't gotten a single darn penny from either of them.
TARP made money for the US Treasury, at least in nominal terms. And CARES is much more, $2.2 trillion...
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Re: corona checks as a rebate on 2020 taxes?

Post by Kenkat »

nps wrote: Sun Mar 29, 2020 12:48 pm
Sparky1500 wrote: Sun Mar 29, 2020 12:18 pm On a related topic: For those of us that closely watch our MAGI in order to avoid the ACA cliff, will the stimulus check amount received in 2020 be counted towards our 2020 MAGI?
No
+1

It’s a tax credit, not income.
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Re: corona checks as a rebate on 2020 taxes?

Post by bigtex »

Will I get $500 more come tax time in 2021 since my wife is having a baby this July?
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Re: corona checks as a rebate on 2020 taxes?

Post by nps »

bigtex wrote: Sun Mar 29, 2020 1:01 pm Will I get $500 more come tax time in 2021 since my wife is having a baby this July?
Yes, if your income is below the phase-out range.
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Re: corona checks as a rebate on 2020 taxes?

Post by OnTrack »

8foot7 wrote: Sun Mar 29, 2020 12:22 pm I'm more than a little irritated that I've been an adult for the $850 billion TARP bailout and the $1 trillion stimulus here and I haven't gotten a single darn penny from either of them.
If you are an owner of American companies and/or are owed money by American companies (that is if you own stocks and corporate bonds, even if in index funds), then you probably have and will benefit from these programs; possibly more than those who do receive checks.
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Re: corona checks as a rebate on 2020 taxes?

Post by 8foot7 »

OnTrack wrote: Sun Mar 29, 2020 1:16 pm
8foot7 wrote: Sun Mar 29, 2020 12:22 pm I'm more than a little irritated that I've been an adult for the $850 billion TARP bailout and the $1 trillion stimulus here and I haven't gotten a single darn penny from either of them.
If you are an owner of American companies and/or are owed money by American companies (that is if you own stocks and corporate bonds, even if in index funds), then you probably have and will benefit from these programs; possibly more than those who do receive checks.
Next year I’ll try that with the IRS. “Surely the Treasury probably has benefitted and will benefit from my spending the money I’d owe in taxes instead supporting small local businesses in the wake of this crisis.” I have my doubts.
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Re: corona checks as a rebate on 2020 taxes?

Post by 8foot7 »

nps wrote: Sun Mar 29, 2020 12:51 pm
8foot7 wrote: Sun Mar 29, 2020 12:22 pm I'm more than a little irritated that I've been an adult for the $850 billion TARP bailout and the $1 trillion stimulus here and I haven't gotten a single darn penny from either of them.
TARP made money for the US Treasury, at least in nominal terms. And CARES is much more, $2.2 trillion...
True enough.
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Re: corona checks as a rebate on 2020 taxes?

Post by fareastwarriors »

A child is born this March. Will the child be a $500 credit for 2020 taxes?
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