I filed as Married Filing Separately in 2018. This tax return was used to determine my Covid-19 stimulus eligibility.
Apparently, the MFS status led to the IRS recording on my return that "Someone can claim your spouse as a dependent" even though neither of us checked that box on our returns (I looked at both returns). Is this an error on their part, or is this normal? This has caused my whole family (me, spouse, child) to be ineligible for the first stimulus checks.
I called the IRS, and they said I have to try to claim a credit on my 2020 return. When I do that, will they be using. my 2018, 2019 or 2020 tax return to determine eligibility? And if the IRS still has on my 2018 records that "Someone can claim your spouse as a dependent", why would anything change when I try to claim the credit if they still use that return to determine eligibility? Do I need to try to amend my 2018 tax return first, even though we never checked this box to begin with?
When you prepare your 2020 return CHECK IT VERY CAREFULLY and make sure that box is not checked again. As long as it is not checked you should be fine. There is a part of your 2020 return where you can reconcile the problem if you did not receive the stimulus money.
The stimulus check is an advance on a credit you can receive on your 2020 tax return. If something went wrong or you did not get the stimulus check this year, you can get it when you file your 2020 return in early 2021—if you are eligible.It will end up on line 30 of your 2020 Form 1040.
just complete the 2020 tax return and answer all the TT questions; the stimulus credit will appear on line 30 of Form 1040.
I take it while you got nothing, you believe you are due $2400 plus $500 for your child, right?
no need to amend anything in the past.
Yes based on 2018 or 2019 tax returns, we qualified for the full stimulus. But if they use 2020's upcoming return to determine eligibility for the stimulus credit, we will not qualify because we had higher income in 2020.
@tanzter - unfortunately, that is the way the law works. The law always was based on your 2020 tax return, with the 2018 / 2019 tax returns used to determine an 'advance payment' since the 2020 tax return wasn't available last spring.
When you complete your TT tax return, it will go through the calculations in any event to confirm how much, if any, stimulus you are due. The same rules are going to apply for the 2nd stimulus and will also be based on 2020 income.