There are a couple of rumors revolving around stimulus checks, which can lead to scamsters making use of this condition to dupe you. Let us break the myths so that you can be smart and have the right information about the stimulus checks.
Myth #1: I will have to declare my payment as income for 2020.
Stimulus checks are not taxable. They are being provided to help people severely impacted by the COVID-19 pandemic, and hence they are not subject to taxes.
Myth #2: If my 2020 income is higher than in 2019, I will have to pay the money back.
Though it is true that Stimulus Checks get calculated based on 2018 or 2019 income and is considered as a refundable tax credit for 2020, still, if your 2020 income is higher than the preceding years, then also you don’t need to pay back the difference.
Myth #3: If my 2020 income is lower than in 2019, I won’t get the difference.
Well, if your 2020 income is lower than your 2019 income, the only thing it will do is increase the amount receivable on your stimulus checks. What you would need to do is claim the difference when you file your 2020 returns.
Myth #4: The refunds I will receive in 2020 will be reduced by the amount of this stimulus payment.
The Stimulus Checks are refundable tax credits and do not impact the refunds you are going to receive on your 2020 returns.
Myth #5: If my dependent child turns 17 in 2020, I have to give that money back.
The rule has it that your dependent child must be under the age of 17 years at the end of 2019. As long as this is true, it doesn’t matter if your child turns 17 in 2020 or not.
Myth #6: If I did not claim my under-17 child as a dependent in 2019, I would not get the $500 payment for that child.
Well, you will not receive a dependent payment now for any child or children, including any babies born this year. This claim on your 2020 taxes will be eligible for a $500 refund when you file your 2021 returns.
Myth #7: The IRS overpaid me, and I’ve been told I have to return part of the money.
Well, if you receive an extra sum from the IRS, then you do not need to return it and know that it is not done by mistake. Though, if you receive a check and then an email or a call to refund the extra amount, then know that it is a scam, and someone is trying to dupe you.
As we always say, knowledge can be your biggest weapon, and these tiring times need you to be updated with information to help receive benefits and avoid being duped by scamsters who are always on the look-out. If you need more information, contact your MyTaxFiler at C19Grants@mytaxfiler.com.