Things to know:
- 2020 return is filed in 2021
- As of now, April 15, 2021 is still the filing deadline
- File on time or file for an extension to avoid paying a penalty for failing to file on time.
- If you are owed a refund, you have up to 3 years to file and receive the money.
Coronavirus and Taxes
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorized the IRS to issue Economic Impact Payments (EIPs)
- EIP1: $1,200 to most U.S. citizens and residents and up to $2,400 for married couples who file a joint return plus $500 per qualifying child.
- EIP2: $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child.
- Generally, if you have an adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above these amounts, the payment amount is reduced.
On the 2020 Form 1040 (individual income tax return), taxpayers are asked about these monies. Did you get them and how much? Be aware that these funds were disbursed in different ways: paper check, direct deposit, and debit cards. Many people also received a notice 1444 A or B explaining these monies; many did not. It is important to familiarize yourself about the Economic Impact Payments (EIPs) and know the exact amount you received. (If you didn’t receive the funds, ask yourself these questions: Have you filed an individual income tax return in previous years? Have you moved/changed bank accounts since filing last?)
Remember, putting incorrect information on the tax return might mean a lengthy delay or alter the size of refunds/payments!
Know, too, that after October 15, 2020, the only way to claim your EIP will be to file a federal income tax return. If you did not file a 2019 tax return in 2020, you may instead be able to claim a recovery rebate credit when you file your 2020 federal income tax return in 2021.