This $1200/$2400 for individuals and couples.

[LuckyCharms]

There has been talk recently that this is just a loan that will need to be settled up next year at tax time. Was this just a rumor? Is it a loan or no strings attached? Does anyone know the scoop?

Thank you.

[jberryhill]

1. It is ordinary income

You left out an option.

[LuckyCharms]

3. That's what I was attempting to get at.

So it will be taxed as ordinary income, thereby effectively reducing the net benefit actually received and beneficial.

That should be made abundantly clear by the administration.

[Cattledog]

4. It will not be taxed.

Kiplinger reports it won’t be included in your taxable income.

[LuckyCharms]

5. Thank you.

[KWR65]

2. The original legislation had it as an advance on 2020 tax credits.

However according to news reports that is no longer the case. The bail out for business is a loan, but some small businesses will not have to pay back the money if it is used to keep people employed.

[Johnny2X2X]

7. Technically it still is

But it's easier to understand if you just say no.

The explanation is that they created a new tax credit and gave it to you early.

What does this mean for your 2020 return (The one you'll file in 2021)? Let me put it this way, if you would have gotten a $2000 refund next year, you'll get a $3200 refund, $1200 of which they are giving to you this year. So next year your refund will still be $2000.

Also, as mentioned, this is tax free.

[consider_this]

6. here's the scoop!

It is basically and advance on a 2020 tax credit, and you might have to pay some back later.

some excepts from https://www.forbes.com/sites/anthonynitti/2020/03/25/congress-reaches-agreement-on-a-coronavirus-relief-package-tax-aspects-of-the-cares-act/#370e0bc5f998

it’s important to understand that any payment you receive acts as an advance payment of a credit you will compute AGAIN on your 2020 tax return. What that means is that when 2021 rolls around and you prepare your 2020 tax return, you’ll have to recompute the amount you’re owed based on 2020 data. Now, a lot of things may be different in 2020 when compared to 2019 or 2018: you may have more income or less tax liability or fewer kids under age 17...you get the idea. In any event, you’ll have to compute the payment owed to you based on 2020 data, and compare it to the advance payment you actually received. If the advance payment was less than what you are owed in 2020— for example, you were phased out in 2019 but not 2020 or you had another child — the excess will be treated as a credit that reduces your 2020 tax liability.

If the advance payment is GREATER than what you’re owed on your 2020 tax return, however, the question becomes: what then? The CARES Act does not explicitly require income recognition for any excess, as was required by its counterpart in the House. Nor is there a mechanism for a taxpayer to repay any excess advance payment. Thus it is entirely possible a taxpayer could, for example, receive an advance payment in 2020 based on 2019 or 2018 income, only to find themselves ABOVE the phase out threshold in 2020, giving rise to no credit on the 2020 return, and yet still not have to repay the excess amount to the IRS.

[LuckyCharms]

8. Thanks for this, but I haven't a clue

What they are saying.

[FBaggins]

10. Let's consider an example

Let's say that you got married last month. You're both employed, but one of you makes much more than the other (we'll say $100k and $40k). Because the amount of your check is based on your 2019 tax filing (or 2018 if you haven't done it yet), one of you will receive $1200 and the other will receive nothing (the income is too high).

Now we move forward a year and you go to file your taxes for 2020. Your joint income is actually below the cap for the stimulus, so you find that you should have received $2,400 as a married couple with joint income below the $150k line. You only received $1,200 when the checks went out... so you'll get the other $1,200 as part of your 2020 tax year return.

The opposite could also happen. Your 2020 income could be much higher than in 2019 and you might receive a check (this year) that you don't actually qualify for. In that case, you would probably owe the money back.

Having said that... if your 2020 income is that much higher than 2019 with all that's going on now? Consider yourself lucky and be happy to pay it back.

[Baclava]

9. More scare mongering rumors, the check is a tax-free, one time payment, no strings attached

[panader0]

11. Even added to my yearly SS income of 10,128,

I'll still be under the amount to file a return. I probably won't get a check.
If I do, it's a big deal for me--half year land taxes and half year propane with
a bit of beer money left over.

[FBaggins]

12. At one point, you were excluded, but I think they fixed that

The most recent that I've seen says:

What about people on Social Security? People on Social Security are eligible to receive the coronavirus relief payment as long as their total income does not exceed the limit. Low-income Americans on Social Security do not need to file a tax return. As long as they received an SSA-1099 form (the Social Security benefit statement), the federal government will be able to send them a payment via the usual way they get their Social Security payment. Retirees and people on disability are both eligible for the special payment.

[brush]

13. If you got a 1099 form from the IRS you'll get a check.

[Marrah_Goodman]

14. We are included now thanks to the Democrats :)

"happy dance"