Another stimulus question

[Cheburashka]

Now, will the opposite take effect? That if you receive money based on 2019, but end up not being eligible based on 2020, will you have to pay it back? I'm not sure. I'm not sure anyone knows the answer to that.

I can't imagine the government trying to get stimulus money back from someone who they gave it to by accident, no. Way too much work (and therefore cost) plus possibly enraging a taxpayer, just due to their own error over what to the IRS is a minor amount of money. And in many cases it would have been quickly spent and the person unable to repay in a reasonable amount of time anyway. No, I think they'd let it go.

 

[Mackenzie Click-Mickelson]

I wasn't suggesting not claiming anyone that should be claimed. But for college kids that have earned income that meets 50% of their support they can certainly claim themselves on their taxes. I imagine there are many who legally could be claimed by either the parent or themselves and it is the taxpayers responsibility to use the law to their advantage.

Lots of tax sites have advocated this for years in relation to the various college tax credits. It is reasonable and legal to claim a child one year, not the next, and then again to maximise the American Opportunity tax credit and/or the Lifetime learning credit.

Your comments made it sound like you are working with loopholes or something by saying "the advice to have our college aged kids claim themselves in 2020." It's not really advice to have them claim themselves. If they can be claimed as a dependent it doesn't mean you have to claim them as a dependent but it still won't change if they are tax code wise considered a dependent. Using the law to their advantage is exactly the issue. Use it to your advantage when you still stay within the confines of the way it is written. That means a parent who has a dependent doesn't have to claim them as dependent, they can if it works out better. That means though someone who is considered a dependent cannot claim themselves though.

 

[kdonnel]

Your comments made it sound like you are working with loopholes or something by saying "the advice to have our college aged kids claim themselves in 2020." It's not really advice to have them claim themselves. If they can be claimed as a dependent it doesn't mean you have to claim them as a dependent but it still won't change if they are tax code wise considered a dependent. Using the law to their advantage is exactly the issue. Use it to your advantage when you still stay within the confines of the way it is written. That means a parent who has a dependent doesn't have to claim them as dependent, they can if it works out better. That means though someone who is considered a dependent cannot claim themselves though.

Due to a lack of guidance from the IRS on whether 529 money spent counts towards support it is can be quite murky deciding if your child can legally claim themselves or not.

https://www.thetaxadviser.com/issues/2010/aug/nichols-aug-2010.html

 

[DisneyJamieCA]

Just file taxes legitimately and stop trying to get free money. It should be you get the stimulus based on your taxes for the year but if you haven't filed it goes by previous taxes. Then when filing later, you pay it back if you should not have gotten said stimulus.

This "free" money for everyone is getting way out of hand.

It’s not free money. It’s our tax money.

 

[HeatherC]

I would wait to file. It is totally legal and above board and if anyone has a problem with that, it is there problem....not yours. Good luck!

 

[mjkacmom]

We claimed Ds22 as a dependent last year, he was really close to 50/50 ( had an apartment but spent months here too, we paid his medical bills, he was our car insurance, cellphone plan..) so DH ran the numbers both ways and since it wasn’t a financial benefit to him to claim himself we claimed him (dd24 claimed himself). I sent him $600 out of our account, and DH did our taxes already and didn’t claim him.

 

[mrodgers]

No. You will not have to pay anything back if you received a payment that your 2020 tax situation would have disqualified you from receiving.

As I understood it back last year, if you got it based on 2019 because you haven't filed yet, and then you don't qualify in 2020, then it will be added back into your taxes. But who knows, the rules change every minute with everything. I have no idea how it's suppose to be. Just wish they would help people they forced out of work instead. I'd rather my taxes go to business owners who haven't worked in a year and didn't get unemployment instead of giving it to everyone whether they call it an economic stimulus or not.

I have no idea what my kid is. She worked the summer, didn't make much money. I don't support her. Her child support now goes to the other kid whom is on my ex's as a dependent. She has her own loan and grants for school so I don't pay for that. All she does is sleep either at mom's or my place, and eats lunch between classes at my place. I just told her I wasn't claiming her this year.

The fun part is I got another $600 plus I'll get the $1400, but I am paying $3000 more in taxes this year with very little income increase. Is the slashing of the tax cuts retroactive for 2020? Funny how the tax cut gave me $1000 more in my pocket but now with nearly the same income my taxes are $3000 more....

 

[mrodgers]

It’s not free money. It’s our tax money.

I said "free" money, not free money... It's our money given back to us but we'll be paying it back in the long run, well, next year's taxes, thanks buddy. Unless as I said, that is retroactive for 2020 as my taxes nearly doubled with very little income difference.

 

[Mackenzie Click-Mickelson]

Due to a lack of guidance from the IRS on whether 529 money spent counts towards support it is can be quite murky deciding if your child can legally claim themselves or not.

https://www.thetaxadviser.com/issues/2010/aug/nichols-aug-2010.html

Well I don't disagree with you there. I almost put in my comment about it being sorta tricky with dependents. I'm only going by your basic comment and giving my base answer from there. There are factors that I cannot know about one's situation

I don't know anyone outside of the DIS who has a 529 anyways so I'm guessing I'm in a way different situation than many people.

 

[DisneyJamieCA]

Just file taxes legitimately and stop trying to get free money. It should be you get the stimulus based on your taxes for the year but if you haven't filed it goes by previous taxes. Then when filing later, you pay it back if you should not have gotten said stimulus.

This "free" money for everyone is getting way out of hand.

I said "free" money, not free money... It's our money given back to us but we'll be paying it back in the long run, well, next year's taxes, thanks buddy. Unless as I said, that is retroactive for 2020 as my taxes nearly doubled with very little income difference.

No, your first sentence says free money without quotes. Bolding for your reference.

 

[lanejudy]

No. You will not have to pay anything back if you received a payment that your 2020 tax situation would have disqualified you from receiving.

I can't imagine the government trying to get stimulus money back from someone who they gave it to by accident, no. Way too much work (and therefore cost) plus possibly enraging a taxpayer, just due to their own error over what to the IRS is a minor amount of money. And in many cases it would have been quickly spent and the person unable to repay in a reasonable amount of time anyway. No, I think they'd let it go.

We were advised to return additional stimulus funds DD received. We correctly received the appropriate amounts for her each time included with our stimulus payment, and she received the full amount direct deposited to her bank account. Twice now. I’m not looking forward to that hassle if it happens again.

 

[kdonnel]

We were advised to return additional stimulus funds DD received. We correctly received the appropriate amounts for her each time included with our stimulus payment, and she received the full amount direct deposited to her bank account. Twice now. I’m not looking forward to that hassle if it happens again.

Looks like you are one of the few edge cases.

Where you're required to return your stimulus payment

• You received a check for someone who has died -- but there's some nuance here
• You don't have a Social Security number.
• You're considered a "nonresident alien" without a US citizen spouse. (This could change, for some, with a third check.)
• You're a noncitizen who files federal taxes.
• You're claimed as a dependent on someone else's taxes.

As for the example being discussed where you received a payment based on 2018 or 2019 income but would not qualify for 2020 income the IRS says:

Q J3. I received an Economic Impact Payment. Do I need to pay back all or some of the Payment if, based on the information reported on my 2020 tax return, I don’t qualify for the amount that I already received?? (added August 3, 2020)

A3. No, there is no provision in the law that would require individuals who qualify for a Payment based on their 2018 or 2019 tax returns, to pay back all or part of the payment, if based on the information reported on their 2020 tax returns, they no longer qualify for that amount or would qualify for a lesser amount.
For example, you received $500 for your child who, based on your 2018 or 2019 tax return, met the qualifying child requirements. That child turned 17 in 2020 and no longer meets the qualifying child requirements. You will not be required to pay back the $500.
Or, for example, you received $500 for your child whom you claimed on your 2018 or 2019 tax return. You do not claim the child on your 2020 tax return because the child’s other parent claims the child. You will not be required to pay back the $500 even if the child’s other parent claims $500 for the same child on his or her 2020 tax return.
Keep Notice 1444, Your Economic Impact Payment, with your 2020 tax records. The IRS will mail Notice 1444 to your last known address within 15 days after the Payment is made.

 

[dreamer17555]

Isn't the new bill including adult dependents making this a moot point for the 3rd potential stimulus?

 

[AndreaDM]

Isn't the new bill including adult dependents making this a moot point for the 3rd potential stimulus?

thats what they’re talking about, but I don’t think it’s a sure thing yet.

 

[neverlandsky]

First stimulus oldest was 16 and we got it. 2nd stimulus oldest was 17 and we didn't get it. They are saying if you made less money in 2020 vs. 2019, file your tax return asap so 3rd stimulus can be based off your 2020 return. If you made more money in 2020 vs. 2019 they are saying wait to file 2020 return so 3rd stimulus can be based off your 2019 return. Personally I'm going by IRS timeline to file our tax return on-time. Federal accepting returns opens tomorrow. Not going to put life on hold waiting for a 3rd stimulus. If it happens it's gravy.

 

[OKbyme]

Found this thread and I realized our youngest, college student, can legitimately file as independent for 2020! That means she gets the past year's stimulus, $1800, plus anything coming this year, and I think that has to happen. She is saving up for an accelerated Master's program, so this will definitely help.

 

[sam_gordon]

Found this thread and I realized our youngest, college student, can legitimately file as independent for 2020! That means she gets the past year's stimulus, $1800, plus anything coming this year, and I think that has to happen. She is saving up for an accelerated Master's program, so this will definitely help.

If I understand things correctly, make sure she files her 2020 taxes asap.

 

[OKbyme]

If I understand things correctly, make sure she files her 2020 taxes asap.

Yes, working on tax returns now. DS, graduated college in 2019 and fully employed in 2020, will also qualify for stimulus payments. Win, win.

Good kids. DS has been paying down his federal loans this entire time as it's all going for principle. DD recently signed up for an accelerated Master's program, and this money will definitely lower any grad loans.

 

[BrerMama]

I filed ours because we inherited some money that was counted as income in 2019 and didn't get full checks last year. We did get the difference taken off our tax bill for our 2020 taxes. But our 2020 income also falls below the cut off threshold so I wanted to get that on record. Our daughter, who lives at home, just turned 21 so we never got any $$ for her.

My FIL received the first stimulus check last year. The money we inherited? It was from him. He died in February 2019. The check went to my husband's sister and she wrote us a personal check for our share. If they asked her for the money back, we never heard about it.