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- [Interviewer] Are those stimulus checks taxable?
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- That is one of the biggest questions
we're hearing right now.
And one thing that taxpayers need to know
is that stimulus check is not taxable.
Also, another thing that they need to know
is if they receive two little stimulus check
lower than they're eligible for
based on their 2020 income
they will receive more in the form of a tax recovery rebate.
And if they received too much
they won't have to pay it back.
- 'Cause that of course, is a big question too.
So just to remind people,
the stimulus check was based on your 2020 income,
and many people hadn't filed well,
clearly you haven't filed yet.
You don't have to file 'til April of 2021.
So the government basically was guessing
based on previous tax returns, right?
So you could have had a big swing
in income one way or the other?
- Exactly, so they distributed those checks
based on the 2018 and 2019 tax returns like you said.
When you go and file your 2020 taxes in beginning of 2021,
you will have your actual income for 2020,
and that's where it will be reconciled
and see if you're eligible for more stimulus,
or if you didn't receive a stimulus check
and you're eligible you may get one then.
- So people might get a little surprise in 2021.
That's kinda cool.
I know there was a big question,
about college kids and you and I were talking about this.
If my college kids had jobs,
I guess, W2 income, right?
Or some sort of self-employed income even,
can they qualify for a stimulus check as well?
- Yeah, that's another question we're hearing right now.
And there were a lot of college students that did work,
as long as they are not claimed as a dependent
and they filed their taxes.
They may be eligible for a stimulus check.
- So does that mean then
you could go back and amend
to take the child off the parent's return
if say in 2019, the child was a dependent.
You're saying the child
has to be independent so to speak.
- Right, so it goes by your 2020 taxes.
So if they are not claimed as a dependent in 2020
then they can go ahead and file their own tax return.
And they may be able to get the stimulus payment,
but it'll be in the form of a tax recovery rebate.
- Right, 'cause people are starting
to think through this now,
should I claim my kids?
Should I not claim my kid?
That's actually a good turning point
as far as deciding what to do on that.
- Right, I mean, this is the time of year
that people start trying to figure that out.
Let's say you have a college student and your income...
The parents' income is where they're not being eligible
for some of the education tax credits, for instance.
And then their college student did work.
It's a win there
because the college student may be able
to get some of their education credits back.
And they also may be able to get the $1,200 stimulus
in the form of a recovery rebate.
And I know a lot of college students
are struggling right now and they need that money.
So it's really good to start thinking about that right now.
- For sure it is.
And that's funny, I got a call from my son
asking if he could potentially do this.
So we might be filing him a tax return
for 2020 for the first time.
If there's another...
There may or may not be another stimulus check issued
by the end of the year
if Congress passes another bill.
Again, people do not have to worry about that.
About, as you said earlier, being overpaid.
- As far as I know with the first stimulus payment
if you receive too much,
you don't have to pay it back.
- What if there is another stimulus check issued
to families before year end?
Do they have to worry about that?
- Well, we don't know what's gonna happen
with a second stimulus check,
but if there is another stimulus check
that is passed,
our Coronavirus Relief Center,
as well as the Self-Employed Coronavirus Relief Center
on our TurboTax blog
will be up to date with the latest information.
Lisa Greene-Lewis, thank you so much for this.
This is a super important for a lot of people,
tons of people, gratefully got these checks
and they're gonna wonder what to do with them in April.
So this is valuable advice.
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