If your coronavirus check is long gone, you could have more stimulus money coming your way next year, even if Congress doesn’t do a darn thing. And if you didn’t qualify for a check this year, you could get...
If your coronavirus check is long gone, you could have more stimulus money coming your way next year, even if Congress doesn’t do a darn thing. And if you didn’t qualify for a check this year, you could get one if you file a tax return next year that shows you’re eligible.
Here’s all of our coverage of the coronavirus outbreak, which we will be updating every day.
Here’s why: The stimulus checks are an advance on a temporary 2020 tax credit. But because of the urgency of the situation we’re in, the IRS was directed to get us that money ASAP, using information from our 2018 or 2019 returns.
That means if your tax situation changes this year, you could get stimulus money if your 2020 return shows that you’re eligible.
7 Reasons You Could Get Stimulus Money With Your 2020 Refund
If one or more of these scenarios apply, you might get more coronavirus money next year. And relax: You won’t owe more at tax time or get a smaller refund next year as the result of receiving a check.
1. You’re No Longer Claimed as a Dependent
Attention, Class of 2020: If your parents or someone else claimed you as a dependent in 2019 but they don’t in 2020, you could get a $1,200 credit, provided that you file a tax return.
Generally, you can be claimed as a dependent if you’re under 19, or you’re under 24 and a student, if your parents provide at least half of your support.
2. You Had a Child in 2020
The parents of any bundle of joy who arrives in 2020 will be eligible for a $500 child coronavirus credit. They’ll have to wait until they file their 2020 tax return, since the IRS doesn’t have record of these new additions yet.
3. Your Child Was Born in 2019, but You Took Advantage of the Tax Extension
If you had a child in 2019 but haven’t filed your 2019 return or got a late start on it due to the coronavirus tax extension, the IRS probably processed your payment using your 2018 return. You’ll get the extra $500 child credit next year when your 2020 return is accepted.
4. You Get Social Security or SSI Benefits and Have a Dependent Child
The IRS automatically processed coronavirus checks for people who aren’t required to file a tax return and receive Social Security, Railroad Retirement, SSDI, SSI or VA benefits.
But in many of these situations, the IRS only received the information needed to send the recipient the $1,200. They didn’t get information about dependent children who qualified for $500 coronavirus child credits unless the recipient provided it using the non-filer tool on the IRS website within a pretty narrow timeframe.
If you got a $1,200 payment for yourself but didn’t receive the extra payments for dependent children under 17, you’ll need to file a 2020 tax return to get the extra $500, even if you don’t normally need to file.
5. Your Income Drops in 2020
A lot of people will no doubt have a lot less income to report in 2020 than they did in 2018 or 2019. If you didn’t qualify for a check because your previous income was above the $99,000 threshold for singles or $198,000 for married couples, you could qualify based on your 2020 income.
Likewise, if your payment was reduced because your income was above $75,000 if you’re single or $150,000 if you’re married, you’d get the difference when you file your 2020 return.
6. You and Your Child’s Other Parent Take Turns Claiming Them for Taxes
The Washington Post’s Michelle Singletary reported on this odd quirk of stimulus payments: It appears that in situations where divorced, separated and never-married parents take turns claiming their dependent children on taxes, each parent could wind up with a $500 payment.
Whoever claimed the child for 2019 has probably already received the $500 payment with their stimulus check. But since the payments are technically a credit for 2020 taxes, there could be a loophole that allows the other parent to get the credit for the same child when they file next year.
7. You Increase Your Retirement Contributions in 2020
Suppose you’re a single filer who earned $80,000 in 2019 and your income stays the same in 2020. You would have gotten a $950 coronavirus check, because payments are reduced by 5 cents for every $1 of income over $75,000 if you’re single.
But if you reduced your 2020 taxable income to $75,000 by contributing an extra $5,000 to your 401(k) or traditional IRA (sorry, a Roth IRA won’t work), you’d get the additional $250 coronavirus payment.
It isn’t worth drastically overhauling your budget over, but it is a nice bonus if you can afford to increase your contribution.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
