By Kaye A. Thomas
Current as of February 27, 2021
Basics of stimulus payments made in 2020 and early 2021.
As part of its response to the coronavirus pandemic, the U.S. government sent stimulus payments to most adult citizens and residents. A first round went out beginning in April 2020, and a second one in January 2021. As of this writing, Congress is considering a third stimulus payment.
Most people received their stimulus payments automatically. There was no need to apply for this government benefit. It simply showed up in their bank account or mailbox.
What if you didn’t receive these two stimulus payments, or you received less than the full amount? In this case you may be able to claim an added benefit on your 2020 tax return. The benefit would reduce your tax or give you a larger refund. Even if you have no income, and no other reason to file a tax return, you can submit a form to get this refund.
Stimulus payments aren’t taxable, so you don’t report them on your tax return. Your return preparer or tax software will ask how much you received, but this is only to find out if you’re entitled to the added tax benefit. People who received the full amount have nothing more to do. Just relax and enjoy the money.
Think you were shortchanged? Begin by learning who’s eligible for the credit, then the maximum benefit for someone in your category. If your income is high enough to phase out part of the credit, consider making a deductible IRA contribution for 2020 by the deadline of April 15, 2021.