The Stimulus Package and Your Taxes, TurboTax Advice

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The Senate is nearing a vote on a third stimulus check.  As that debate continues on Capitol Hill, here's what you need to know about the last stimulus check and your 2020 taxes.

First, a stimulus refresher. On December 27, 2020, President Trump signed a $2.3 trillion economic stimulus package into law. And while it was a huge help to many people, there are some things you need to know come tax time.

So let’s run through a few of the provisions.

More stimulus checks: Another round of stimulus checks was sent out -- $600 if your tax status was single, and $1,200 if it was married filing jointly, in 2020. You also may have even got another $600 for a dependent.

Remember though, stimulus payments are NOT taxable to you. Even better, if the check you received actually was too much based on your income, you will not have to pay back the overage. And if you received too little, “you can claim more in the form of a recovery rebate credit when you file your taxes,” says Lisa Greene-Lewis TurboTax  (INTU) expert and CPA.

More unemployment benefits: Another $300 in unemployment benefits, is available through March 2021. That extra $300 IS taxable income. so be sure to have taxes withheld so you are not caught with a big tax bill.

A key provision for the Earned Income Tax Credit: Taxpayers are allowed to use either their 2019 or 2020 income to see if they qualify for the Earned Income Tax Credit. Huge benefit since tons of people had income due to job loss. (link to video 6 self-employed)

And with that lower-income, you may be eligible for some income-based credits and deductions that you weren't eligible for before, so run the numbers on everything.

So be sure to watch the video above and make sure you benefit from all the available provisions from that economic stimulus bill.

TurboTax will help you through the entire tax season. So far, Greene-Lewis has tackled a number of tips from advice for gig workers, parents, crypto investors, and more. Plus, watch her videos discussing last-minute, and most overlooked deductions and credits.

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