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Christian

Rebates

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In reading the material  provided by WK on the stimulus rebates I am puzzled by this "The rebate amounts are advance refunds of credits against 2020 taxes" which means the rebate amounts will be shown as credits on the 2020 returns I guess ?

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The 2020 returns will have a credit for the appropriate amount based on 2020 taxpayer(s) and dependent(s). There'll be a subtraction of the amount of the advance check, but not below zero. Any positive result will be a refundable credit on the 2020 return.

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@Christian ,there are a couple of other good posts with ongoing discussions on this same topic over in the COVID-19 subforum that you might want to read also.

I'll be moving your topic there in a little while.

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I'm told it will be similar to the ACA credit/tax.  Too much ACA benefit results in a tax, too little ACA benefit results in a refundable credit.

The amount of stimulus being forwarded now is calculated based on 2019 tax return (or 2018 tax return if 2019 is unavailable).  As part of the processing of the 2020 tax return next year, the income criteria on the 2020 tax return (no other year) will be measured and compared to the stimulus payment.  If stimulus was overpaid, the difference becomes a separate tax under "Other taxes."  If stimulus was underpaid, the difference becomes a refundable credit.

It is expected that the overwhelming majority of taxpayers will have neither a tax or a credit.

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22 minutes ago, Edsel said:

If stimulus was overpaid, the difference becomes a separate tax under "Other taxes."

No payback if the stimulus check received is too high.

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Thanks for the correction Judy.  I was misinformed by a radio tax program where people called in to have their questions answered.

If I understand you correctly, the measurement of stimulus versus eligibility goes in only one direction.  If people are overpaid then they don't have to pay it back.  But if they are shortchanged, they will be entitled to a refundable credit on their 2020 return.

 

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