Some people must return their stimulus
If you’ve got money that you don’t think you were entitled to, you should determine whether you need to send it back.
There are several reasons why you may have received a stimulus in error. The two most common are a result of your adjusted gross income (AGI) exceeded the limit or if you had a spouse that passed away.
Your AGI is based on all your sources of taxable income for the year. It can fluctuate based on many factors, including getting a raise, losing a job, a change in business profit, or a gain from the stock market.
Since it’s difficult to estimate how much money you’re making after deductions, the IRS used your AGI from your previous tax return to calculate how much of the first and second stimulus you would receive. However, the limit for the calculation is different for the first and second stimulus amounts.
You can find your AGI on line 8b of the 2019 1040 federal tax form. If you didn’t file federal taxes in 2019, you can find your AGI on line 7 of your 1040 return for 2018.
If you’re filing single and your AGI is under $75,000 you will receive the full amount of $600. As your AGI goes up, the amount of your stimulus decreases. If your AGI is $87,000 or more, you’re not eligible for the stimulus check. This is down from a limit of $99,000 cutoff for the first check.
If you’re filing as head of a household, you would be eligible for the full $600 check if your AGI is $112,500 or less.
If you are a married couple filing jointly and your AGI is below $150,000, you are eligible for a $1,200 payment. The amount of your stimulus would decrease until you reached $174,000. The limit was $198,000 for the first check.
If you received a payment for a spouse who died in 2019 or earlier, you should return the entire payment, unless it was made to joint filers and one spouse is still living. If the check was made to you and your spouse, you should return half the payment.
However, if the check is made in both your names and you can’t cash it, you’ll need to return the whole amount to the IRS. After the IRS processes the returned payment, it will issue a new check with the correct amount for you.
If you haven’t cashed the check, write “VOID” in the endorsement section on the back of the check. Let the IRS know why you are returning the check on a separate piece of paper.
If you cashed or deposited the stimulus check, use a personal check or money order made payable to the US Treasury. You will also need to write the 2020 EIP and social security number of the person who is on the check. Let the IRS know why you are sending the check on a separate piece of paper.
David Zubler is a tax accountant and Enrolled Agent in East Tennessee, providing tax strategies and representing clients before the IRS and has over 25 years of tax experience. He is the author of six tax books and has shared tax advice on national TV. He is the founder and president of Your Tax Care. The company provides business and tax education, including David’s one-minute tax tip radio recordings at YourTaxCare.com. David can be reached at (865) 363-3019 or contacted by email at firstname.lastname@example.org.