As employees return to work in Ohio, questions remain about how 2020 tax returns could be affected by the that many Americans got as part of the CARES Act. We ask an expert in this edition of 鈥淥H Really?鈥�
The stimulus payments, or Economic Impact Payments, were sent out this spring during the coronavirus pandemic. They鈥檙e what鈥檚 known -- from a tax standpoint -- as an 鈥渁dvance payment of a refundable credit.鈥�
University of Akron Tax Professor says if you received stimulus money 鈥� or even if you were supposed to, but haven鈥檛 yet 鈥� you won鈥檛 have to pay tax on it, and it won鈥檛 decrease any refunds you might get on the tax return you鈥檒l file next year.
鈥淟et鈥檚 say that your refund, as you regularly calculate it, was $1000. Then you say, 鈥業 was supposed to get $1200 [and] I did get $1200, so there鈥檚 no change to my refund.鈥欌��
McCoskey鈥檚 advice is to keep track of how much you received, since it鈥檚 unlikely the government will send out statements to taxpayers.
What about unemployment?
Since the beginning of the coronavirus pandemic, close to in Ohio 鈥� more than the total over the past three years.
The record number of filings crashed the state鈥檚 unemployment website earlier this year as businesses closed, people were laid off, and the unemployment rate in Ohio climbed to .
McCoskey says at tax time next year, you may owe the government money if you elected not to withhold taxes when you filed.
鈥淯nemployment compensation is taxable. The reason for that is: it鈥檚 there to replace lost wages -- and those wages would have been taxable -- therefore the unemployment compensation is taxable.鈥�
And that would apply to benefits even if there wasn鈥檛 a pandemic. McCoskey adds that the government will send out to people who received benefits.
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