With the ongoing COVID-19 outbreak, taxes may not be at the top of your mind. Even if they are, you may not want to travel outside your house for tax preparation help. Here’s what you need to know to file your taxes in 2020.
Friday, January 29, 2021 marks the 15th annual EITC Awareness Day. On this day, the IRS encourages organizations across the country to bring attention to the EITC by hosting events and engaging media. This is also a time to highlight free tax preparation and other refundable tax credits like the Child Tax Credit, the American Opportunity Tax Credit, the Premium Tax Credit, and the Recovery Rebate Tax Credit (stimulus checks).
If you didn’t get your first or second stimulus check, don’t worry — you can still claim the payment in 2021 as a tax credit. The stimulus checks are a federal tax credit for the 2020 tax year, known as the Recovery Rebate Credit. You can claim the Recovery Rebate Credit by filing a tax return in 2021 for Tax Year 2020.
One eligibility requirement to get the first and second stimulus check is that you cannot be claimed as a dependent on someone else’s tax return. If you didn’t receive your stimulus checks because you were wrongly claimed as a dependent on a 2019 tax return, you can file a 2020 tax return in 2021 to get your stimulus payment(s).
By law, the first stimulus check can be reduced if someone owes child support. However, as the married spouse of someone who owes child support, you will still get your portion of the stimulus check. Unfortunately, in some cases, people did not receive their stimulus payment because the entire stimulus check went to their spouse’s child support debt.
If you didn’t receive the additional $500 from the first stimulus check and/or the additional $600 from the second stimulus for your eligible children, you can claim the amounts as the Recovery Rebate Credit when you file your 2020 federal tax return.
This year, to support economic relief from the COVID-19 pandemic, Congress passed a new ‘lookback rule’ which means if you earned less in 2020, you can use either your 2019 or 2020 income on your taxes—whichever one gets you the most money back.