I’m confused. My parents claimed me on their 2019 taxes (which was fine and agreed upon). However, I got married and filed my own 2020 taxes. When the third stimulus checks were released, my parents had not filed their 2020 taxes yet so they received stimulus money for me as their dependent (which they are more than willing to give me).
The problem is, based on my 2020 taxes, I’m not eligible for a third stimulus check because my husband and my income combined is over the limit. So the only reason I got the money was because the money was based off of my parents 2019 taxes. Am I safe to spend the money? Or will the Internal Revenue Service want it back from me when the next tax season rolls around?
You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected]
Individuals making less than $75,000 a year in adjusted gross income and their dependents each would receive checks totaling that full amount. The payments decrease for individuals earning $75,000 and up — and they phase out completely for individuals making $80,000 or more and couples making $160,000 or more in adjusted gross income.
The $1,400 stimulus check is not a loan. This third stimulus check is an advanced tax credit on your 2020 taxes. If you don’t qualify under your 2020 income-tax filing, then it’s likely that the IRS will adjust that in your next refund and/or ask for payment. You could wait to see what the IRS does, of course, but that leaves you with another question: Should you pay it back?
If you earned enough money in 2020, it does not seem right to keep it. Yes, many people received checks that they put in the bank or used to put toward items that are not considered necessities. But they qualified for the economic impact payment, per the rules. The IRS gives some guidelines here on how to do that. If it feels like a tax hack, give it back.
Hello there, MarketWatchers. Check out the Moneyist private Facebook
group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.