Stimulus Refundable Tax Credit

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Stimulus refundable tax credit. President elect joe biden s coronavirus stimulus package includes additional stimulus payments and tax credits targeted toward families. The sooner your file your tax return the sooner you could potentially get a new stimulus check and. So if you receive a credit for the 600 stimulus.

Biden wants to raise the maximum value of the child and. Individuals who have experienced a life change since the first round of stimulus payments were issued may also qualify. The recovery rebate credit by which you can claim that money will be factored into your overall tax return including liabilities.

Because you re getting what amounts to a refundable tax credit now in the form of a stimulus payment rather than waiting to get the money from the credit in 2021 when you actually file your 2020 tax return you re in effect getting an advanced refundable tax credit. The recovery rebate credit was eligible to be paid in two rounds of advance payments during 2020 and early 2021. Generally this credit will increase the amount of your tax refund or decrease the amount of the tax you owe.

A refundable tax credit like the american opportunity tax credit or earned income tax credit. Even if you don t owe a penny of tax you get the full 1 200 per person provided you don t earn too much and you re not a dependent. Stimulus money not your tax refund is the main reason to file as early as possible this year.

It is a tax credit against your 2020 income tax. But the stimulus check is the other kind of tax credit.