A stimulus check is actually a check delivered by the U.S. federal government to an individual taxpayer. Stimulus checks are designed to stimulate the sluggish economy by giving consumers some additional spending cash. When taxpayers use this money, it encourages increased consumption and drives up sales in manufacturers and retailers and so spurs the national economy. In a normal economic climate, tax paying individuals would contribute the same amount of money to the common good as they receive in their checks. A recession however changes this scenario.
How does this affect you? If you have received one or more stimulus checks, you may be eligible for a tax relief. The Internal Revenue Code provides that individuals who have received payments from the Qualifying Benefits Test (QBT) may receive a tax refund or Allowance. An example of a qualifying benefit is the First Round Adjustment (FRAC) payment. This payment is only available to taxpayers who have otherwise met all other requirements for eligibility. If you received a payment from the QBT but failed to meet the requirements, you may be eligible for a refund or Allowance.
What are the requirements for receiving a refund or allowance? These payments are based on a variety of factors including your filing status. To determine your filing status, you will need to contact the Internal Revenue Service. There is also a form available from the IRS site where you can determine your filing status for free.
If you received one or more stimulus checks, you may qualify for a reduction in the total amount of taxes you owe. You can also receive a reduction in the amount of taxes you currently owe on a variety of items including: home mortgage, fuel, IRS refunds, employer withholding, charitable contributions, alimony, and state income taxes. To determine whether you qualify for these funds, you should check with the local tax office in your area. If you are not a U.S. citizen, you will also need to provide proof of citizenship or legal status.
If you qualify for either a refund or an Allowance, you may also qualify for Medicaid. Each year, the U.S. Department of Health and Human Services administers a program that pays for the medical expenses of individuals who qualify for Medicaid. To be eligible for this program, you must be below 18 years of age, be a resident of the United States, and meet other requirements. In order to qualify for Medicaid, you must sign an application and provide proof that you qualify for Medicaid, and that you meet certain income requirements. . . . . . . Along with providing proof of eligibility, you must also provide documentation relating to any dependents you have.
Many of the same rules apply to filing status as those for receiving stimulus checks. You must meet the income limits, and you must provide proof of age and citizenship. Once you file your income taxes, you must wait six months from the end of your last year of income to claim your first stimulus check. Receiving these funds is just one of many ways the government provides assistance to citizens through tax credits and deductions. To learn more about filing taxes, including what forms you will need and how much money you can save, contact an experienced local tax firm today.