Why you want your stimulus check
Most people are going to be confused by this title. Money is coming, why wouldn't you want it? Well, I've been fielding a lot of questions from people that don't, and I think they're wrong. Part of it is because of misinformation. In an earlier post I covered most of the ins and outs of who is getting a check and for how much. Even though the law was signed less than a week ago, people have been talking about it for much longer than that. Some people are talking about things that didn't make it into the final bill and others are just from a bad interpretation of it. So, lets go through the main things I hear from people not wanting it.
Can I tell the IRS to not send it to me? There's no current way to do that and I'd be surprised if they made one. If you're eligible for it, it's coming if you want it or not.
It's just going to reduce my 2020 refund or make me owe. It will do neither of those things. A new credit has been created and instead of waiting for next tax season, they're sending it to you now. If your check is for $1,200 and normally you only get a 300 refund, this does not mean that you will have to pay $900 next year. If you normally get a 300 refund and 2020 is a normal year for you then you'll still get your normal $300. It's a new credit so everything is in addition to what would normally be on your return and wont negatively impact it.
It's just a loan and I don't want debt. The problem people have with this is that it's referred to as an Advance credit and the amount you are eligible for is reconciled on the 2020 tax return. If you take that at face value it does sound like a loan, but it's not. It's more along the lines of a grant. One of three things is going to happen when you file your 2020 taxes.
1. If the amount of the credit is equal to the amount you got in your check, there's no impact at all.
2. If 2020 shows that you should get more than what your check was for, you'll get whatever extra amount your eligible for as part of your refund.
3. If 2020 shows that you were over paid...nothing happens. There is no repayment provision in the law. So if you 2019 tax return made you eligible for a stimulus check of $3,400 and then in 2020 your income spikes and you're eligible for $0, you get to keep the full amount and don't pay it back.
I don't need it/it's going to put a strain on the government. If that's your position I want you to take yourself out of the equation for a second. Think about everything that's going on right now and why these checks are going out. The check may come with your name on it, but it's not for you. They're for the economy. If your income is stable and not effected by all this, great. That's fantastic for you but many people are struggling and many businesses will not survive this. The best thing you can do with your check is either spend it at local small businesses or donate it. That's going to get the money to who needs it most and may actually generate more in tax revenue than you were given as it moves through the economy.
If you have any questions about the coming checks, post a comment below. If you're having trouble with the IRS or your state, feel free to contact me. Through my office in Hartford County, CT I work with clients throughout the country.
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Windsor Locks, CT 06096