2020 Tax Credit: Stimulus & taxable Social Security

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delamer
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2020 Tax Credit: Stimulus & taxable Social Security

Post by delamer » Sat May 09, 2020 10:44 am

My question is regarding any tax credit we (MFJ) might receive on our 2020 return as a result of the stimulus legislation.

2020 is the first year that either of us received Social Security. Our income for the year will be a combination of earned income, Social Security, pensions, and investment income (taxable brokerage account).

Our total income will put us above the cutoff ($198,000) for a stimulus tax credit, if all of it is counted toward AGI. However, if only 85% of our Social Security income (the taxable portion) is counted toward AGI, then we will get a small stimulus tax credit.

Does anyone know how AGI is determined in this situation? I’ve had no success Googling this issue, so any guidance would be appreciated.

pshonore
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by pshonore » Sat May 09, 2020 10:52 am

delamer wrote:
Sat May 09, 2020 10:44 am
My question is regarding any tax credit we (MFJ) might receive on our 2020 return as a result of the stimulus legislation.

2020 is the first year that either of us received Social Security. Our income for the year will be a combination of earned income, Social Security, pensions, and investment income (taxable brokerage account).

Our total income will put us above the cutoff ($198,000) for a stimulus tax credit, if all of it is counted toward AGI. However, if only 85% of our Social Security income (the taxable portion) is counted toward AGI, then we will get a small stimulus tax credit.

Does anyone know how AGI is determined in this situation? I’ve had no success Googling this issue, so any guidance would be appreciate
AGI (Line 7 of Form 1040 for 2018) is calculated using the taxable amount of Social Security

kaneohe
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by kaneohe » Sat May 09, 2020 11:43 am

https://www.irs.gov/pub/irs-pdf/f1040.pdf

if you look at the 1040, you can see how AGI is calculated.........

Topic Author
delamer
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by delamer » Sat May 09, 2020 11:55 am

kaneohe wrote:
Sat May 09, 2020 11:43 am
https://www.irs.gov/pub/irs-pdf/f1040.pdf

if you look at the 1040, you can see how AGI is calculated.........
Thanks; I see now that there is a separate taxable amount for Social Security that goes into AGI.

Since this is our first year getting those payments, I didn’t pay attention to that portion of the 1040 in earlier years.
Last edited by delamer on Sat May 09, 2020 11:58 am, edited 1 time in total.

vtMaps
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by vtMaps » Sat May 09, 2020 11:56 am

As already mentioned, the AGI for stimulus payments is the AGI. Perhaps you're confused by one of the several modified AGI that are used in other situations. --vtMaps
Historical Fact: Justin Smith Morrill represented Vermont in congress, had a dog named 'Trump', and wrote legislation establishing the Land Grant Colleges.

Topic Author
delamer
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by delamer » Sat May 09, 2020 12:02 pm

vtMaps wrote:
Sat May 09, 2020 11:56 am
As already mentioned, the AGI for stimulus payments is the AGI. Perhaps you're confused by one of the several modified AGI that are used in other situations. --vtMaps
Partially not knowing if there was a specific MAGI related to the stimulus payments and partially because I never paid attention to how that non-taxable portion of Social Security was handled on the form.

kaneohe
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by kaneohe » Sat May 09, 2020 4:27 pm

you mentioned earned income.........any way to contribute to 401K or similar to reduce your reported income?

Topic Author
delamer
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by delamer » Sat May 09, 2020 6:05 pm

kaneohe wrote:
Sat May 09, 2020 4:27 pm
you mentioned earned income.........any way to contribute to 401K or similar to reduce your reported income?
The earned income phase is over, thankfully!

So no more deductions.

donall
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by donall » Sat May 09, 2020 6:38 pm

The stimulus payment is based on 2019 income (or 2018 income if 2019 not yet filed). Stimulus payment is a pre-2020 tax credit. My understanding is that if you receive a stimulus payment and then 2020 AGI is more than $200K then you will not need to pay it back.

Topic Author
delamer
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Re: 2020 Tax Credit: Stimulus & taxable Social Security

Post by delamer » Sat May 09, 2020 6:53 pm

donall wrote:
Sat May 09, 2020 6:38 pm
The stimulus payment is based on 2019 income (or 2018 income if 2019 not yet filed). Stimulus payment is a pre-2020 tax credit. My understanding is that if you receive a stimulus payment and then 2020 AGI is more than $200K then you will not need to pay it back.
We definitely will not qualify for an advanced stimulus payment based on our 2019 income (most recent return filed).

But it looks like we’ll get a few hundred dollars in tax credit when we file for 2020. The current payments are an advance on your 2020 amount owed. But ultimately qualification is based on 2020 income.

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