Coronavirus stimulus payments have already begun hitting bank accounts, and more Americans will soon see direct deposits or checks arriving in the mail.
These payments, authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, are worth as much as $1,200 for each adult plus an additional $500 per dependent child. Although the amount you’ll get goes down by $5 for each $100 you make over $75,000 as a single filer or $150,000 as a married joint filer, the majority of Americans will get a substantial sum of money from the government.
When you get this money, you’ll notice there are no taxes withheld from it. And if you’re used to being taxed on all the income you earn, you may be wondering if you’ll have to eventually pay taxes on your coronavirus stimulus funds.
Are coronavirus stimulus checks taxable?
The good news is, coronavirus stimulus checks are not subject to state or federal income tax. And the money won’t be counted as taxable income, so it can’t push you into a higher tax bracket or affect your eligibility for any deductions or credits that have income limits.
The money you get is not considered taxable income because it isn’t income — it’s an advance on a federal tax credit.