NEW ORLEANS – Congress is getting close to giving most Americans another $1,200 stimulus check. But the question is, will the IRS turn around and make you pay the money back?
In April, many were allotted a $1,200 stimulus check from the government to soften the financial burden during the coronavirus pandemic.
However, the much-needed income is now raising questions as people wonder if they have to pay the money back or claim as additional income next tax season. Tax expert Ronald Cojoe says that’s not the case.
“It’s completely tax-free and tantamount to a grant,” Cojoe said. “You don’t have to pay that back at all. As a matter of fact, if you didn’t get your stimulus check this year, there will be a feature on your 2020 tax return where you can recoup the money that you didn’t get this year.”
What about any additional supplements people receive? Cojoe says if it is granted, much of the guidelines will remain the same as the first one. However, parents who claim young adult dependents may be able to receive additional funding.
“They’re gonna put some money in to give college students,” he said. “College students who are over 17-years-old to get the $500 now.”
What about additional unemployment supplement many have received like the $600 weekly unemployment stipend? Cojoe says resident won’t have to pay this money back either but they will have to pay taxes on it and he offers some advice.
“Either have them start having them take some money out, I would say 10 percent taken out every week of your unemployment benefits so your taxes will be paid in advance or you can go on IRS.gov and pay the estimated taxes to account for the taxes that’s gonna be due on your 2020 tax return,” said Cojoe.
No matter what government funding is received, Cojoe urges everyone to think two steps ahead with their money especially during this pandemic.
“You gotta get a budget,” Cojoe said. “I know sometimes it gets difficult because things come up but you have to have a budget and have some money put aside for a rainy day fund.”