A few questions about how the stimulus payments will work.?

Question

I've tried to follow the updates on this stimulus bill (specifically the direct payments to individuals), but I still have 2 questions I haven't been able to find answers for.

Question 1: Is it possible that people will have to repay some or all of their stimulus in the form of an increased tax liability in 2020 if they qualify for less than what is initially sent.?

For example someone who earned $70k in 2019 would get a check for $1200, but if they got a big promotion and their income went up to $100k in 2020 they wouldn't qualify, so would that $1200 end up being added to their 2020 tax liability, or do they just get to keep it?

Another example:  what about dependents who turn 17 in 2020? If you claimed a 16 year old on 2019 taxes is the IRS going to send you an extra $500 then demand it back when you file your 2020 taxes and see that they didn't actually qualify you for the extra funds?

Question #2: Is the tax credit refundable? If so, what portion?

In other words, if someone already has $0 tax liability, (such as a married couple with only $20k combined income), would they get the full amount or a reduced amount. I know that the original bill (about a week ago) proposed making it 50% refundable, so people could get as little as $600/person, but I thought that may have changed.Note: I am aware that as of this morning it isn't final and could change (or could fall through completely).

Slickterp · Answer

It is based on your 2018 or 2019 filing, so your income in 2020 doesn't matter.

Age of the dependent does not matter.  17 year old are also dependents.

Max Hoopla · Answer

Check on irs.gov.  If they don't know yet, how can we.

John · Answer

The answer to your first question is yes.  The stimulus payment is an advance credit on your 2020 taxes.  If one is eligible based on 2018 AGI, for example, they will have to repay all or part of the stimulus payment if they make too much in 2020.  It will work just like the Premium Tax Credit does now.
For your second question, my understanding is that it is fully refundable.  Don't accept that as final, though.  I have seen nothing saying it wasn't fully refundable, and if it wasn't it would be a conflict between that and sending out the full $1,200.

Cei · Answer

So they're going to send money to everyone.
At some point they will want it back. How do you think they'll get it?
Get ready for a large tax rise in the next year.

A few questions about how the stimulus payments will work.?

Trending Questions