Economic Impact Payment

Economic Income Payment FAQ:

Q1. Will I need to provide information about my Economic Impact Payment to claim the Recovery Rebate Credit on my 2020 tax return when I file in 2021? (updated November 24, 2020)

A1. Keep the notice you received regarding your Economic Impact Payment with your 2020 tax records. These notices are mailed to each recipient’s last known address within 15 days after the Payment is made.

Q2. Is the Payment includible in my gross income? (updated April 24, 2020)

A2. No, the Payment is not includible in your gross income.  Therefore, you will not include the Payment in your taxable income on your Federal income tax return or pay income tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.

Q3. I received an Economic Impact Payment. Do I need to pay back all or some of the Payment if, based on the information reported on my 2020 tax return, I don’t qualify for the amount that I already received?? (added August 3, 2020)

A3. No, there is no provision in the law that would require individuals who qualify for a Payment based on their 2018 or 2019 tax returns, to pay back all or part of the payment, if based on the information reported on their 2020 tax returns, they no longer qualify for that amount or would qualify for a lesser amount.

For example, you received $500 for your child who, based on your 2018 or 2019 tax return, met the qualifying child requirements. That child turned 17 in 2020 and no longer meets the qualifying child requirements. You will not be required to pay back the $500.

Or, for example, you received $500 for your child whom you claimed on your 2018 or 2019 tax return. You do not claim the child on your 2020 tax return because the child’s other parent claims the child. You will not be required to pay back the $500 even if the child’s other parent claims $500 for the same child on his or her 2020 tax return. 

Source:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-j-reconciling-on-your-2020-tax-return