Why stimulus checks won’t be taxed, but unemployment benefits will be

By Tami Luhby


The Internal Revenue Service has sent out nearly 130 million stimulus payments, and more are on the way.

Americans earning up to $99,000 a year can receive up payments of up to $1,200, while married couples without children get up to $2,400 if they make no more than $198,000. For families, the threshold depends on how many children they have. Your income is typically based on your 2018 or 2019 tax return.

This money is tax-free and won’t affect any refunds you might be owed, said Howard Gleckman, senior fellow at the Tax Policy Center.

What’s more: You won’t have to return any funds if you received a payment but wind up earning more than the threshold in 2020.

And if you didn’t qualify based on your prior earnings but end up making below the threshold this year, you’ll receive your stimulus payment when you file your 2020 tax return.

Also, stimulus payments will not count as income for government assistance programs, such as Medicaid or food stamps, though the money could be considered part of your assets if you save it for more than 12 months, said Elizabeth Lower-Basch, director of income and work supports for the Center for Law and Social Policy, an advocacy group.


Read the full article here

Source URL: https://www.cnn.com/2020/05/11/politics/stimulus-checks-unemployment-benefits-taxes/index.html