Economic Stimulus Payments: Here is the latest

The economic stimulus payments which were sent out this Spring are technically an advance payment toward a 2020 tax credit. What this means is that on your 2020 tax return, there will be a reconciliation of the amount that you received. This tax credit was calculated using your 2019 (or 2018 tax return, if your 2019 tax return had not been filed by the time the payment was sent). However, the credit will be calculated based on your 2020 income. The good news is that if you received a larger rebate than you should based on your 2020 income, you will not need to pay back the difference.

Also, if your income is lower, you may receive an additional rebate and, if you had a child in 2020, you may get a credit for your newborn on your 2020 tax return.

These stimulus payments are not taxable.

Here is a recap of the rules on the economic stimulus payment. The income amounts are based on your 2020 income. However, the advance payment which you may have received earlier in 2020 was calculated based on your 2018 or 2019 income:

• Single filers with an AGI of $75,000 or less will receive $1,200.

• Married couples filing jointly with an AGI of $150,000 or less will receive $2,400.

• Taxpayers filing head of household with an AGI of $112,500 or less will receive $1,200.

• Taxpayers with incomes above these thresholds will have their payments reduced on a sliding scale.

• Stimulus payments phase out for single filers with an AGI of $99,000 or above, for joint filers with an AGI above $198,000, and for heads of household with an AGI above $136,500.

• Each qualifying child under age 17 will add an additional $500 to the check.