Are Stimulus Checks Taxable? Here's What You Need To Know

Some Americans are learning that they owe the federal government money after receiving financial relief from a previous coronavirus aid package, prompting others to question whether stimulus checks are taxable.

The Trump administration had sent two rounds of stimulus checks to millions of Americans. The first round of payments amounted to $1,200 per individual and $2,400 per married couple. Congress approved a second round of payments in late December, worth up to $600 per individual, $1,200 per married couple, and $600 for every child younger than 17.

The stimulus checks are considered an advance on a 2020 tax credit and will increase the amount of tax refund or lessen the amount of tax you owe. The payments are also not taxable.

“No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer's refund or increase the amount they owe when they file their 2020 or 2021 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs," the IRS said.

Unlike the two rounds of checks, the government’s weekly federal unemployment benefits are taxable. It includes the $300 payments through mid-March from the CARES Act and $600 payments for four months beginning in December 2020.

The IRS on Friday said it would begin the tax filing season on Feb. 12. Normally, filing federal tax returns begin in the second half of January. The COVID-19 pandemic and the need to distribute stimulus payments pushed the tax filing season ahead by half a month.

“Pushing the federal tax filing season a few weeks allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits,” the agency said.

Americans who are expecting a refund or believe they are eligible to receive but have not yet been given the two rounds of stimulus payments made since March may get it this year after filing the 2020 tax return.