Moceri Minute

We have received many questions regarding the stimulus checks, so we are going to try to answer a few.

  • Question: Do I have to pay tax on the money I receive?
    • ​​​​​​​Answer: No, the tax rebate in advance payment of a special 2020 tax credit and is nontaxable.
  • Question: I owe back taxes, will this reduce my stimulus check?
    • ​​​​​​​Answer: No, the IRS will not apply the stimulus check to offset past-due taxes. It will, however, reduce it for delinquent child support.
  • Question: We had a baby in February 2020, will we get an extra $500 stimulus check?
    • ​​​​​​​Answer: Yes, assuming you otherwise qualify, but not this year. You will get the extra $500 on your 2020 tax return which will be filed next year.
  • Question: I took my required RMD from my traditional IRA in February 2020, now Congress has waived RMD’s for 2020. Can I put it back into the IRA?
    • ​​​​​​​Answer: Yes, and it will be treated as a tax-free rollover, provided you return the funds to the IRS by July 15 and you do not violate the one-rollover-every 12 months rule. If you took your RMD in January, as of now you are out of luck on the rollover.
  • Question: My small business is applying for a Paycheck Protection Program loan. If we get the loan and it is forgiven, is the canceled debt taxable?
    • ​​​​​​​Answer: No, it is not taxable.
  • Question: Are unemployment benefits taxable?
    • ​​​​​​​Answer: Yes, for federal and Michigan and 32 other states for income tax purposes, some states have special rules and will need to be looked at on a state by state basis. 

Thank you, stay safe and healthy!