2020 Income Tax and the Covid stimulus payments

[AirmensMom]

Last edited Sun Jan 31, 2021, 04:42 PM - Edit history (1)

I'm not a tax accountant (or any other kind of accountant), and I don't play one on TV.

I have downloaded H&R Block 2020 program and plugged in all our numbers and have a fairly good idea of what our refund will be, barring any unexpected forms that might show up at the last minute.

What I noticed is this:

After I downloaded the latest update for the program, our refund went up by quite a bit.

Then I was taken to a question: Did you get a stimulus payment in 2020 or 2021? It then explained both stimulus payments and how much they were. It didn't really have a place to say yes or no, but on the same page, it asked: Did you get the first stimulus payment?

If I checked Yes, it went to a new page asking how much you got. Our refund was lowered by the amount I put in that box. (Just for goofs, I checked the No box and the refund went back up.)

Next was the same thing with the second stimulus payment. I answered Yes and our refund was lowered by the amount I put in that box.

So at the end of it, our refund was the same as it was before downloading the program update. Apparently, the update made the assumption that we hadn't received any stimulus payments until I answered the questions.

The point? If you haven't gotten your stimulus payment(s) yet, it looks like this will be the way for you to get them. It's simply added to your income tax refund. It wasn't obvious to me how/if this would happen, but now it is. I hope I've explained it so that it makes sense. I've seen several posts about people who haven't gotten theirs. I also wondered what happens to the people who may have had a great job in 2019 and then, because the payments were based on their income that year (or so I thought), maybe they lost their job in 2020 and still didn't get one because their 2019 income was too high. It seems like that sort of scenario would be taken care of with an income tax refund for 2020 as well.

In any case, I hope this helps.

Edit: To try to be more clear: I'm not saying stimulus payments are taxed. I'm saying that if you didn't receive them, it looks like they'll show up as an addition to your refund.

[Rorey]

1. Thank you for sharing that!

I did get mine, but it's good to know that it'll be taken care of for those who haven't gotten it.

[AirmensMom]

5. I was relieved to see that as well.

[mr_lebowski]

2. Or is it being deducted if you got it, which would suck

Sounds like you're fairly sure that's not it, but are you totally sure?

[AirmensMom]

3. I am totally sure.

The fact that the program needed to be updated and I had plugged in our income without that question coming up, and then got the same answer after the update tells me that they did not deduct it. Besides, the amount that we're getting back is about what I had figured on before even opening the program.

I've been doing our taxes for close to 45 years so have a pretty good idea of what to expect based on how we fill out our W-4.

[mr_lebowski]

4. Cool, makes sense, thx :) nt

[Ferryboat]

6. We didn't get taxed on the stimulus payments

I use a professional tax accountant, we specifically discussed this issue.

[AirmensMom]

7. That is true.

I'm saying that it appears that if you didn't receive the stimulus payment, it appears to be part of an income tax refund.

[Ms. Toad]

13. That is correct -

The stimulus checks were advance refunds of a refundable tax credit. If you didn't get the checks (i.e. you didn't get the refund in advance), you will get it when you file your return.

It works like advanced earned income tax credits. You have the earned income tax credit refunded in advance through your paychecks throughout the year. If you don't, then you get it all in one chunk when you file your tax return.

[Vinca]

17. That's good to know. I've been getting our things together for the accountant and

I was wondering about that.

[KentuckyWoman]

8. TurboTax as well.

If you did not receive stimulus and should have, it adds the amount to your refund. Looks like HR Block goes the other way, assumes you didn't get it and auto adds to start, then pulls it out if you report a yes.

MY opinion is HR Block made a mistake in programming. Too many people are going to think they are getting jipped when they see the refund amount drop off.

[AirmensMom]

9. Good point.

Although, it could be that it worked that way because I had already finished everything before downloading the update. I should start over and see what happens with a fresh return.

[MarcA]

10. Is it true the IRS will not start processing returns until Feb. 12?

Not the same topic but related. I had just heard this from some involved in tax preparations.

[AirmensMom]

11. I have no idea.

I'm not sending mine in yet in case there are updates or I get some form I'm not expecting.

[SharonClark]

12. Yes

COVID Tax Tip 2020-09, January 28, 2021
The IRS will begin accepting and processing 2020 tax year returns on Friday, February 12, 2021.

https://www.irs.gov/newsroom/2021-tax-filing-season-set-to-begin-february-12

[MarcA]

14. Thank you for posting the info and link. n/t

[Turin_C3PO]

15. You're right.

I didn’t receive my $600 and the IRS “get my payment” said “status not available”. I called and they told me to claim it on the recovery rebate line of my tax form. So that’s what I did. Hopefully I get it sooner rather than later.

[AirmensMom]

16. Yay!

I'm so glad you'll be getting your payment finally. And I hope it's sooner as well.