1200 Stimulus Advance On Taxes

The stimulus checks are considered an advance refund of a 2020 tax credit not a loan said neal stern a member of the american institute of cpas financial literacy commission.

1200 stimulus advance on taxes. The stimulus checks handed out this year to combat the financial effects of the pandemic are technically an advance tax credit called the recovery rebate credit. The income thresholds are. Some tax credits reduce your overall tax bill the more credits you claim the less in taxes you.

That stimulus payment was essentially an advance on your 2020 tax credit so if you qualified but never received your payment you can still get it. These are the ones the government will give you a refund for even if you ve hit net zero and don t owe anything. The stimulus checks are technically an advance of a special tax credit for the 2020 tax year.

If you get a 1200 stimulus check and traditionally get a tax refund of 800 you will owe the government 400 for 2020 instead. Some of the bill summaries note the stimulus is an advance on your 2020 tax credit but consumers shouldn t think of the credit like an advance that s due back later. You just need to claim it on your tax filing.

A refundable tax credit like the american opportunity tax credit or earned income tax credit. A tax credit reduces your tax bill. But the stimulus check is the other kind of tax credit.