While there’s been discussion on the progress of a second stimulus check, many may be wondering how the money will impact their tax filings in 2021.
CNBC reported that the first stimulus check was a refund based on your latest filings with the IRS. Taxpayers do not owe taxes on the money and will not have to pay anything back when they file in 2021.
So if a second stimulus check is issued, taxpayers won't owe any money on it either.
Some Americans might even receive more money in next year’s tax refund if they were underpaid in 2020.
“If you receive too much of a rebate check, you won’t have to pay anything back. If you receive too little, you will get more back in the form of a tax credit,” tax expert Lisa Green-Lewis told the outlet.
Many taxpayers are still wondering whether they will even receive a second stimulus check.
While President Donald Trump signed executive orders extending federal coronavirus relief, lawmakers have remained unclear over the details of a second stimulus package.
Here are several things you need to know about Trump’s new orders and the status of a possible second stimulus check.
What’s Included Under the Executive Orders?
Trump’s new orders extend unemployment benefits, suspend payroll taxes, and offer federal eviction and student loan relief.
The extension of unemployment benefits comes after the July 31 expiration of those authorized under the CARES Act. Under Trump’s order, they will be issued at a reduced rate of $400 per week, rather than the original $600.
None of the orders include a second stimulus check.
Will Another Bill That Includes a Second Stimulus Check Be Passed?
While both Republicans and Democrats seem to be on board for a second direct payment of COVID-19 relief for the American people, there is much disagreement on many other details that would be included in another stimulus bill.
This is why, while a second package is likely, it is difficult to predict when or how negotiations will reach.
House Speaker Nancy Pelosi, D-CA, and Senate Minority Leader Chuck Schumer, D-NY, said that they put forth a $2 trillion compromise on Friday that was rejected by the White House.
In May, House Democrats passed the HEROES Act, a $3 trillion second relief bill that Senate Majority Leader Mitch McConnell, R-KY, would not be brought to a vote on the Senate floor.
At the end of June, Senate Republicans put forward a proposal of their own in the $1 trillion HEALS Act.
While Congress has yet to come to a consensus over the latest coronavirus relief package, experts are hopeful Americans may get a seconds stimulus check.
“What I would say to people is there is still a pretty good chance that you’re going to get these payments,” Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center told CNBC. “But it’s impossible to know when or how long it’s going to take.”