As news of the first wave of Americans receiving their COVID-19 stimulus checks began to break, misinformation and myths began to spread all over. We value our relationships with our clients and want to dispel a few of the more common myths about the Economic Impact Payments that you have been hearing. Your safety and security will always be our top priorities.
1. The stimulus check will be taxed.
You won’t need to pay taxes on any stimulus money you receive. This is because the stimulus check is considered a refundable tax credit. This also means there is no risk of the stimulus check impacting your gross income or tax bracket. The IRS has also confirmed the stimulus funds will not impact your eligibility for government assistance or benefits.
2. Next year’s tax refund will be lower.
The stimulus money is independent of any money you would receive in the form of a year-end tax refund. A person becomes eligible for a tax refund when they withhold too much money in their W2 relative to their tax liability. The stimulus money will not impact any refund you are still due from your 2019 or 2020 tax filings.
3. My salary was greater than $75,000 last year, but this year it will be less. I’m not eligible.
If you made more than $75,000 individually in the 2018 and 2019 tax year, you are ineligible for the full $1200 stimulus payment at this time. If you are going to make below the income limit in 2020, you may still be eligible for the payment when you file your 2020 taxes based on your income level.
4. My check will take a long time to arrive.
Luckily, if the IRS already has your direct deposit information from a previous year’s tax refund or because you receive social security benefits, you should have already received your stimulus funds or will receive them in the coming weeks. If you have not previously set up direct deposit information with the IRS, you can do it on their dedicated portal.
5. Social Security recipients can't get the check.
Receiving social security payments doesn’t impact whether a person is eligible to receive the stimulus payment or not. This is also true for those receiving disability payments. If you are claimed by someone else as a dependent, you will not be eligible for the payment.
6. The IRS will call me with information.
The IRS conducts all business via certified mail through the United States Postal Service. Someone on the phone claiming to be from the IRS is a good sign that you may be the target of a scammer. You can learn more about protecting yourself from stimulus check scams from our blog on the topic.
7. You need to file a tax return to be eligible.
While most people do not need to take action to receive their stimulus check, a portion of low-income earners that do not file a tax return will need to provide their account information in order to be eligible for the stimulus check. This information can be provided on the IRS website.
We know that these are confusing and difficult times and we want to remind you that we are here to help. You can learn more about using our digital banking tools to manage your COVID-19 stimulus payment here.
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