AMMON, Idaho (KXPI/KIFI) - You probably got a stimulus payment in 2020 and possibly another one in January 2021 or you're still waiting on it. Did you know, not everyone gets one? What about your taxes? How does a stimulus payment work when it comes to file?
A lot of questions.
News anchor Todd Kunz talked with Dayton Robison, a certified public accountant with Taylor Robison & Company PLLC, to get the answers.
"It is a stimulus check. So they want to stimulate the economy," said Robison.
They, meaning the government. They want you to spend your stimulus and put it right back in the economic system.
"You know, if you want to save it, invest it, spend it, you know, that's what it's there for is to kind of help keep the wheels of the economy moving," said Robison. He has taken many questions lately about the stimulus payments that originated because of the economic shutdowns due to the COVID-19 pandemic. He said some people don't dare spend the money when they get the check.
"I've heard a lot of my clients come in and say, 'Well I'm just going to save it just in case the government wants it back.' And from everything we've seen, they're not going to ask for it back," said Robison.
But that does bring up a very valid question. How does the stimulus payment affect taxes?
"So the money that you would have received back in March and April of last year (2020) with the first round of the stimulus, and with the money that you received in January (2021) or will receive here in the near future, is not taxable," said Robison.
Not taxable. So there you go. It is basically a credit that you take on your 2020 taxes that you're probably filing right now.
But what if you didn't get a stimulus? There are certain reasons.
maybe family status had changed.
"Let's say you had a kid in 2019 that you didn't get a stimulus check for back in March because you hadn't filed your taxes yet or any other reason, you're going to be able to claim that as a credit on your tax return this year," said Robison.
Not everyone knows this, but there is a certain age group right in the middle that gets left out altogether.
"There's quite a few people around here that have kids that turned 17 or they're 18 in high school or college, living at home, and didn't get a stimulus check. The parents didn't get the $500 in the first round in March and April (2020) and maybe the student moved out of the house and they're going to file their own taxes this year. There is a provision in the stimulus where you can choose the income level that you want to claim for your stimulus. So either your 2019 income or your 2020 income. There's not a lot of guidance out there, but there may be an opportunity for your college student, that's moved out of the house, to claim themselves as a dependent this year and get that stimulus check for themselves if they're providing their own support," said Robison.
To make sure that happens, Robison says when you file your 2020 taxes, make sure you do not claim your college student as a dependent. They must file for themselves. It's called the Recovery Rebate Credit.
Also, you have to put on your taxes the amount of the stimulus that you received for both rounds.
As for businesses, in a bill passed in December, Congress made it so that that PPP loan forgiveness is not taxable, and you will still get to claim the expenses that you paid with those proceeds. Robison said called it a double dip benefit.
There are plenty of scam circulating right now surrounding stimulus money. The Internal Revenue Service said there are four major scams that stand out right now. They are:
Robocall check scams: The scammer will call pretending to be the IRS and ask for your personal financial information.
Email and text scams: The scammer will send you a phishing emails, text messages, or messages on social media claiming that they are the government.
Fake websites: If you click on suspicious links, they will likely take you to fake websites that will download malware onto your device and steal your information.
Phony checks: Scammers have been mailing fake checks that look exactly like the official government-issued paper stimulus checks... once deposited, the scammers text you pretending to be the government asking for some of the money back, claiming too much was sent.