COLUMBIA, S.C. (WIS) - The COVID-19 pandemic has caused numerous changes in the lives of Americans, and many are wondering how unemployment, stimulus checks, and working from home could affect your taxes as filing season approaches.
1. Do I owe taxes on the stimulus money?
No. The IRS does not consider the stimulus checks to be income.
According to the IRS, “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.”
2. How can I claim my stimulus check if I didn’t receive it?
Any eligible individuals can claim a Recovery Rebate Credit on their 2020 tax return. The IRS had until Jan. 15 to distribute the second $600 stimulus payment and said that payments in the mail could take up to 3 to 4 weeks to arrive from that date.
3. Will I be taxed on my unemployment assistance?
Yes. The COVID-19 pandemic unemployment assistance payments are considered taxable income.
When signing up for unemployment benefits, the form asked whether you wanted your federal or state withholdings taken out of those benefits. If you opted not to have those withholdings taken out, you may actually owe some taxes.
4. What do I need to file taxes with my unemployment benefits?
Be on the lookout for form 1099-G. This form, which you can find in your SC-DEW portal, shows you how much you were paid in benefits and how much you paid in federal and state taxes. If you didn’t withhold any taxes, you could owe the government money when you file.