CaresAct - EIPs for 2021

Understanding the Next Round of the Econimc Impact Payments

Call us for an appointment!

909-276-4086

As we saw with the Stimulus Checks issued in 2020 under the CARES Act, the amount of your Stimulus in 2021 (Assuming Congress and the President agree) will be based on your last filed return.

Why do you care?

If your 2019 tax return has you just under the income limits for the Stimulus checks that were issued and your income increased in 2020 to where you might be over the previous income limits for phase out payments you should hold off on filing your tax return for 2020. This is because your 2021 Stimulus check will be based on last tax filing, just like the stimulus checks issued in 2020. The first check was generally issued on a taxpayer's 2018 return, whilst the second stimulus was based on their 2019 tax return.

So, if your income went up in 2020 and puts you over the projected phase out levels based on your filing status, you should talk with your tax professional and prepare your taxes but then hold off filing until after the stimulus checks have been issued.

If the rules stay the same (as we expect they will) and your reported income to the IRS on your 2020 return goes up the IRS will not be asking for any portion of the stimulus payment to be returned.

As always, you should consult with your tax proffessional for specific advise for your circumstances.

ServicesTax Planning and PreparationAccountingBusiness Set UpFinancial Planning
© 2022 Knecht Income Tax Service, LLC