Frequently Asked Questions

Are Covid stimulus payments taxable?

Stimulus or economic impact payments you received are included in your income, thus they are not taxable.

If I didn’t get my third stimulus payment of $1400, can I get it on my 2021 tax return?

Yes, you can get your 3rd stimulus payment as a Recovery Rebate, to be added to your 2021 tax return.

Who qualifies for a recovery rebate?

You are eligible if in 2021:

  • You did not receive your stimulus payment.
  • You are a US Citizen or resident alien and have a valid social security number.
  • You were not a dependent of another taxpayer.
  • Your income doesn’t exceed:
    • $150,000 if you are married filing jointly
    • $112,500 if you are the head of household
    • $75,000 if you are single or married but filing separately

I’m not sure I received the correct amount for my third stimulus payment.

IRS is sending out Letter 6475, which tells you how much you received. Bring it with you when you do your taxes. Your tax preparer can use this information to compute your recorded payment and add any money due you to your tax refund.

What if you received too much stimulus based on their 2018 or 2019 tax return?

No action is required if payments exceed the amount they qualify for. You can keep the overpayment.

How is the 3rd stimulus payment calculated?

The full amount of the third stimulus payment is $1400 per person ($2800 for married couples filing jointly) and an additional $1400 for each qualifying dependent.

Are unemployment benefits taxed?

Unemployment benefits are taxable on both federal and state levels. Unemployment benefits are reported to the IRS on Form 1099-G showing the amount paid to you and whether taxes were withheld.

I haven’t received information from NYS unemployment regarding the amount of unemployment I received.

NYS no longer sends out your 1099-G, which is your statement of unemployment benefits. You must download this information from the NYS Department of Labor website. Bring form 1099-G with you when you do your taxes.

What forms do resident aliens use to file US taxes?

U.S. resident aliens use the same forms and mailing addresses as U.S. citizens. If you are a resident alien for the entire year, you can use the same filing statuses available to U.S. citizens and claim the same deductions allowed to U.S. citizens.

Are Social Security benefits taxable?

Your social security benefit statement form SSA-1099 should be mailed to you in January. If you didn’t get your copy, you can download a copy by logging in to “my social security account.” SS benefits may be taxable depending on your age (have you reached your normal retirement age?), marital status, and how much other income you have from pensions, retirement accounts, or part-time work. The government taxes as much as 85% of Social Security payments for seniors who earn more than $34,000 ($44,000 married).

Do I have to claim my child as a dependent to qualify as Head of Household for taxes?

To qualify for head of household filing status, you must have a qualifying child or a dependent who is a close relative living with you whom you support. However, a custodial parent may be eligible to claim head of household even if they released a claim to exemption for the child. Also, if a parent qualifies as your dependent, they don’t have to live with you.

I received the Advance Child Tax Credit but I’m not sure of the amount.

IRS is sending out Letter 6419, which we use to calculate how much of the credit you received and how much will be paid to you in your tax return. It’s in a smaller size envelope and says “Important Tax Information” at the top.

If I received the Advance Child Tax Credit, must I still file?

The amount your received is only half of the credit you are entitled to, so filing will definitely be beneficial.

I lost (never received) my identity protection PIN. What should I do?

You can get another PIN online, or your tax professional can help you when you do your taxes. Without your PIN you can’t file your tax return electronically and your mailed return will be part of the IRS backlog of 10 million tax returns.

I took money from my retirement account because of Covid in 2021. How do I pay it back?

You can pay it back back over 3 years with no penalty or interest. Remind your tax preparer when you do your taxes. If you don’t pay it back there is no penalty, but you will have to pay tax on a third of the amount you received each year.

I didn’t make much money in 2021, should I still file for Earned Income Credit (EIC)?

You can use your 2019 income for EIC if it computes to a higher EIC amount then your 2021 income.

I received form 1099-C for amounts unpaid when my credit card was cancelled. Do I have to pay taxes on it?

if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable, and you must report the canceled debt on your tax return for the year the cancellation occurs. There are certain exceptions on a case-by-case basis which may reduce or eliminate the amount of taxable income.

What can the IRS do to collect money you owe?

If you do not pay taxes you owed to the IRS, they are legally entitled to take  one or more of the following collection actions:

  1. Filing a Notice of Federal Tax Lien against your property. A federal tax lien may appear on your credit report. Once a lien is filed, you won’t be able to sell or otherwise dispose of the property until the lien is released.
  2. Notice of Levy. The IRS may levy assets such as your wages, bank accounts, Social Security benefits, or retirement income, and seize property you own.
  3. Offsetting a refund. If you are entitled to a tax refund, the IRS can take the refund to pay off tax debts you owe.
  4. The IRS can garnish your wages. They have the right to tell your employer to send part of your wages to them to pay off tax debts.