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The multitrillion-dollar bill, signed into law in March, had provisions addressing everything from small businesses’ payroll needs to strengthening unemployment insurance.
And another round of stimulus measures could be on the way, as a number of states – including Florida, Texas and California – see a spike in confirmed cases.
Here’s a look at how the IRS considers economic impact payments and unemployment benefits for tax purposes.
The short answer is no, you will not owe income taxes on the cash and do not need to include it as part of your taxable income on your 2020 return.
The payment is technically being structured as an advance on a temporary, refundable tax credit.
Additionally, if you make more money in 2020, you will not have to pay back any of the cash.
The payments will be $1,200 per adult for those with adjusted gross incomes of up to $75,000. The threshold for married couples is $150,000 – they are eligible for $2,400 and $500 per child.
Meanwhile, President Trump told FOX Business on Wednesday that he supports another round of economic impact payments – valued at more than $1,200.
Benefits from the federal government and state governments are generally taxable as income. Individuals need to request that taxes are withheld or estimated quarterly payments can be made.
As previously reported by FOX Business, 37 percent of Americans thought the benefits were not considered taxable income.
These expanded benefits are scheduled to expire at the end of the month. Lawmakers are considering how to continue supporting unemployed individuals in the next stimulus package.
While forgivable PPP loans are generally being treated as grants, there is one issue recipients should be aware of.
Since the loans are tax-exempt, the guidance was based on existing law, which generally aims to prevent people from receiving a “double tax benefit.”
If the PPP grants were taxable, the deductions would be viable, the administration has said.