question about if stimulus funds are considered income

[RicROC]

I have a question about whether covid relief stimulus funds should only be sent to people who need them.

Are Stimulus funds considered to be income? If so, on next year's federal taxes, for those people with higher incomes, does the higher tax rate basically recoup the $2000 which was sent to them? Hence, in the long run the people who need the stimulus get it and those who don't need it, pay it back in their federal taxes?

This question came up at a recent dinner party.

[doc03]

1. No they are not taxable income nt

[Wounded Bear]

2. I believe that stim funds should be exempt from fed income tax...

State laws may vary, however.

[Turin_C3PO]

3. No, it's not taxable.

[rhiannon55]

4. I work for the ACA federal marketplace

helping people sign up for for "Obamacare". When we put in their income to see if they qualify for a tax credit to offset the cost of their monthly premiums, we have been told not to include stimulus checks. Apparently, they are not taxable; tax credits are based only on taxable income.

[Shermann]

5. Technically a tax credit, so no nt

[Hoyt]

6. It's not. But even if considered income, I'll gladly take $2000 and payback $200 to $400 in taxes.

[Mattgoetznolovefromm]

7. Aside from the fact they are not taxable, as explained by others,

perhaps you don't understand tax brackets. A higher bracket does not mean all your income is taxed at the higher rate.

[SharonClark]

8. IRS website can answer all your questions.

[LizBeth]

9. Good info. I assumed the stimulus would be taxed at the end of our year. Thanks all.