<In collaboration with ChaiPlus1.com>

This post focuses on two points:

1. EIP for people who did not file taxes in 2018 or 2019.
2. How your Stimulus eligibility can be affected by a change of circumstance in 2020. 

Stimulus/EIP Overview

• The EIP (Economic Impact Payment), referred to by many as “Stimulus”, is part of the CARES Act, signed on March 27 2020
• It gives $1,200 per person (US Citizen or non-citizen who is eligible to work in the USA)
• A “dependent” over 17 on someone else’s tax return is not eligible for the $1,200. 
• It also gives $500 per qualified child claimed as a dependent. The person filing gets the $500 (not the dependent).
• Eligibility is based on income. To be more specific, it’s based on something called AGI – Adjusted Gross Income. See the bottom of this page where to find your 2019 AGI.

If you received all the funds, great!

Didn’t Receive the Money Yet?

• If you didn’t file taxes for 2018 or 2019, file now.
• If you don’t need to file taxes for 2018 or 2019, fill out a non-filer form to claim the stimulus money. If you didn’t complete the form by November 21st, you’ll get the EIP when you file your 2020 taxes. 
• If you filed 2018 or 2019 taxes or completed the non-filer form and STILL didn’t get the Stimulus, check the status of your EIP HERE or call (877) 777-4778 for further assistance.

2020 Circumstance Change? Only for the Better!

The decision on whether you are eligible for the EIP and how much you should get is based on your tax return (or non-filer form if you are not filing taxes for 2018 and 2019). If your eligibility is the same based on your 2018, 2019, and 2020 returns, then it doesn’t really matter, as you would anyway get the same amount based on each year.

How about if your situation changed from year to year? Say for example you earned more in 2018/19 and less in 2020. Or you had a child who turned 17 in 2020 (or in 2019 and your Stimulus was based on your 2018 return)? Or if you had a child in 2020 after receiving the Stimulus? All these situations would make you eligible for a different amount of EIP based on which year the EIP is being based on. If this is something relevant to you, read on.

When you file your 2020 taxes, they will first see how much you would be eligible for had you not yet received a Stimulus Payment. Then, if you already received the stimulus payment based on your 2018 or 2019 return, and your situation changed in 2020, you can only stand to gain, as you will receive any funds you are now eligible for.  You won’t have to repay any overpayment though, so don’t worry about that.

Some Scenarios

• Had a baby in 2020: Get $500 when you file 2020 taxes.
  You will get $500 after filing your 2020 return. The same thing applies if you had a baby in 2019 and got your Stimulus based on 2018 taxes (and did not receive $500 for the baby). 
• Your child turned 17 during 2020: You don’t need to return the $500
  Even though you will not eligible for the $500 based on your 2020 tax return, you will not have to pay back the $500 you already received. Thes same would apply if you received the EIP based on your 2018 tax return and your child turned 17 after Jan 1st, 2019.
• Became independent in 2020: Get the $1,200
  If you were a dependent on someone else’s tax return in 2018-2019 and will file an independent tax return for 2020, you should receive $1,200 after filing 2020 taxes.
• Lost income in 2020: Get the difference.
  If you became more income-eligible in 2020,  you may be eligible for more payments and will get the difference between what you already received based on your 2019/19 return and what you are should receive based on your 2020 return. 
• Gained income in 2020: You don’t have to pay anything back
  If you become less income-eligible in 2020,  you won’t have to pay anything back even if based on the 2020 income you are eligible for less EIP.
  
• For parents who file taxes separately: Double payments?
  If Parent A claimed children as dependents on the 2019/19 tax return and got $500 per child, then Parent B claims the same children as dependents in 2020 (instead of Parent A), Parent B will get the $500 per child but Parent A won’t have to pay anything back (based on IRS draft guidance). 
• Had a Baby AND Child Turned 17: Unclear 
  If you had a new baby in 2020 (which should get you $500) and your older child turned 17 in 2020 (making you eligible for $500 less), does the extra $500 for the new baby get canceled because the other child turned 17?
  Based on draft guidance from the IRS, it looks like it will zero itself out, being that your 2020 tax return calculates your EIP and if you are eligible for more than you already received, you get the difference. So, even though you are eligible for $500 for the new baby, you are eligible for $500 less due to the child turning 17, so in total, you are eligible for the same amount you already received, hence you will likely not be eligible for an additional $500.

So What Do You Need to Do if Your Circumstances Change in 2020

File taxes for 2020.

When you file your 2020 taxes, you (or your accountant or tax prep software) will calculate how much EIP you should receive based on the 2020 return. If you should be getting more than you already got, you get the difference as a tax refund after filing your 2020 taxes.  If you should be getting less EIP based on your 2020 taxes, don’t worry. You don’t need to pay anything back.

In short

If you become more eligible in 2020 you get more funds. If you become less eligible in 2020 you don’t have to return funds. Win-win  🙂

Related Articles

• • More info at HomeUnemployed.com
  • More info at ChaiPlus1.com 
  • Guidance from the IRS 
    • Draft Guidance for 2020 1040 (Tax Return)  – Page 57 helps you see if you’re eligible based on your 2020 return.
    • EIP Overview
    • Frequently Asked Questions
    • Change of circumstance in 2020

< This post will be updated as new information comes to light.>