I’ve been hearing confusion all day today about stimulus checks and it’s time to set the record straight! Don’t believe these 4 myths:
- You need to sign up or register for your stimulus check
- You’ll pay taxes on your check
- You have to pay your stimulus back
- You might have to return it
Let me break it down as to why these are myths:
Myth #1: “You need to sign up or register for your stimulus check.”
Truth: If you have direct deposit set up with the IRS, it’s automatic. If you’re not sure, check this sexy new IRS tool.
If you didn’t file for last year or the year before, you do need to use the “non-filers” section of the aforementioned sexy new tool.
Myth #2: “You’ll pay taxes on your check.”
Truth: You won’t owe taxes and there’s no chance the money can bump you up to the next tax bracket which would make you pay more in taxes. (The only exception to this is if you are behind on child support…which you hopefully are not.)
Myth #3: “You have to pay your stimulus back.”
Truth: The stimulus checks are an advance on a tax credit (not loan or refund) or this year’s taxes. It’s just coming your way early. If you didn’t qualify with last year or the year before’s return and your income is impacted now, you could qualify next year (remember this is a credit for next year technically).
Myth #4: “You might have to return it.”
Truth: Nope. Let’s say you qualified in 2018 but not 2019…they aren’t going to ask for it back. Pinkie swear.
I know there are also a lot of questions about whether or not this affects your refund (I generally have many thoughts on why you shouldn’t get one but I’ll save those for another article…) and the answer is “no.” Hard stop. Your refund is money that comes back to you because you’ve overpaid taxes over the entire course of the year. This stimulus check is a payment that’s apart from tax obligations. It won’t reduce your refund. It won’t increase your 2020 taxes when you file those next year.
Don’t fall for rumors around finances now. I know it’s confusing but look at all of your options as part of a holistic approach to your money. This stimulus check is not going to save the day alone. But, together with grants, unemployment, and other relief programs it can. That’s something to believe.
A version of this article was originally published on Forbes.
