Updated: May 20
Taxes are one of the most daunting aspects of adulthood, and there are things to know as students that no one ever teaches you. This is your crash course to how taxes work, what resources are available to assist you, and other helpful things to know when Uncle Sam comes knocking!
Frequently Asked Questions
Q: I didn't receive my stimulus check(s)--can I still get those funds?
A: Unpaid stimulus is included in this year's tax return as a credit to either offset tax owed or be refunded directly to the taxpayer. This credit is called the "Recovery Rebate Credit" and it is equal to the amount of stimulus you did not receive, but qualify for based on your 2020 taxes. For example, if you had a child in 2020 or it was the first year you were eligible to file as an independent, you can receive that stimulus money on your tax return.
Q: I received COVID unemployment payments--do I have to pay tax on them?
A: Unemployment is always considered taxable income. However, if the total of your income comes to less than the standard deduction, you may not end up owing tax anyways.
Q: What else is different about taxes this year?
A: Generally you are only allowed to deduct charitable deductions if you choose to itemize. For the 2020 tax year, taxpayers are allowed to deduct up to $300 of cash contributions paid to a qualified charitable institution in addition to the standard deduction.
Early IRA distributions are generally subject to a 10% tax penalty. If the distribution was made to cover living expenses due to COVID, this penalty is waived for the 2020 tax year.
The CARES Act also allows taxpayers to choose to use their 2019 income to calculate their 2020 Earned Income Tax Credit if that is more advantageous to them.
Q: Are nonresident or resident aliens eligible for COVID stimulus?
A: Nonresident aliens are NOT eligible for COVID stimulus. If a nonresident received a stimulus payment by mistake, they will need to pay it back to the IRS.
If the taxpayer is considered a resident for tax purposes (see green card, substantial presence, and MFJ rules), they ARE eligible for stimulus.