MINNEAPOLIS — We continue to get questions from KARE 11 viewers who want to learn more about the stimulus checks the federal government will be sending out later this month.
A lot of viewers want to know when they'll start receiving their stimulus checks and whether the money will come as an advance from our 2020 tax refund.
Scott Kadrlik, a CPA with the firm Meuwissen, Flygare, Kadrlik & Associates helped us answer a few questions:
QUESTION: Scott, we’re hearing a lot of conflicting information about these stimulus checks, can you help us set the record straight?
ANSWER: We'll do what we can (laughs).
Q: People are wondering if this credit is just an advance on your normal tax refund, that if you get $1,200 right now, you're going to get $1,200 less at the end of the 2020 tax year, is that correct?"
A: That's really not how this program is designed. If in a normal year you normally would receive a refund of let’s say, $1,000 you still will receive a refund of $1,000. It’s a different set of money.”
Scott explains it like this.
Your normal tax refund, if you get one, and this one-time credit, are two completely separate piles of money.
They really don't affect each other.
However, when it comes to this credit, the federal government wants to make sure this money goes out to the people who need it the most, who make less than $75,000 or $150,000 for couples filing together.
So, the federal government is using your most recent tax return to see if you qualify.
But let's say you lose your job, or you have a kid this year.
The federal government will then use your 2020 tax return, the one you file next year, to make any changes.
Let's say your 2019 tax return shows you made $100,000, so you didn’t qualify for this credit.
But you lost your job in 2020, or you had your hours cut, and your 2020 tax return shows you made only $60,000.
In that situation, Scott says you would receive the $1,200 credit when you file your 2020 taxes next year.
Another example, let’s say you have a child in 2020, after the tax credit is given out.
Again, Scott says your 2020 tax return will show you have a new dependent, so you would now qualify for the $500 dependent credit and you will get that money after you file your 2020 tax return.
But what happens if you make more money in 2020 and your 2020 tax return shows you SHOULDN’T have received the credit?
"Right now, it's a little bit of a gray area, but we believe there will be nobody paying back an advanced credit that they received," Scott Kadrlik says. “At this time, it doesn’t look like you’ll have to pay that money back.”
But as we've seen, the federal government is still hashing everything out.
So, things might change in the coming months.
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