All about stimulus payments: getting the right amount, and claiming a tax credit if you didn’t.
In response to economic concerns raised by the covid pandemic, the federal government sent money to most taxpayers. Formally these are known as economic impact payments, but most people call them stimulus payments.
There’s a surprising amount of complexity behind these stimulus payments. Most Americans can remain blissfully ignorant of the details. They received the maximum amount and have nothing more to do. Yet millions can claim additional benefit on their 2020 tax returns. Some can even enhance that benefit if they make a deductible IRA contribution by April 15.
Key point. Assuming we get a third round of stimulus payments, some taxpayers may be able to enhance the benefit by getting their 2020 tax returns in quickly, while others will receive more if they delay filing.
Here’s the full scoop.
Stimulus payment overview
Surprisingly, it’s actually a tax credit.
Who’s entitled to stimulus payments
More or less everyone, with four exceptions.
Stimulus payment amount
It’s potentially affected by filing status, military status, and qualifying children.
How the stimulus payments phase out
They’re reduced at higher income levels.
Claiming the recovery rebate credit
The stimulus payment you claim on your 2020 tax return.
Maximize your stimulus payments
How to get more out of the stimulus payments.
Stimulus payment resources
The law, and IRS guidance.