Don’t Throw Away Your Notice 1444! You’ll Need It for Your 2020 Taxes
- Discover the information Notice 1444 includes.
- Learn how you may qualify for additional credit on your 2020 return.
- Find out which tax records you should keep.
The IRS is mailing all recipients of Economic Impact Payments a Notice 1444 that provides important information. The information includes the amount of their payment, how the payment was made and how to report any payment that wasn’t received. If you’ve already received your economic impact payment, you’ve probably already received this document too. This notice issues from The White House and looks more like a letter than a traditional IRS notice. However, the notice number is in the upper right of the heading, just below the date. Fiducial advises you hold onto this document–it’s an important one.
Why you need your Notice 1444
For security reasons, the IRS mails Notice 1444 to each recipient’s last known address within 15 days after the payment goes out. Don’t discard this notice, as you may need it when you prepare your 2020 tax return. The economic impact payment is actually an advance payment of a refundable tax credit based upon your 2020 tax return. In order to get the money into people’s hands during the time of greatest need, these payments generally were made based upon each individual’s 2019 return, or in some cases their 2018 return.
How your Economic Impact Payment may affect your 2020 taxes
Your filing status, income and dependents could, however, change in 2020. What if the advance payment was less than what you are entitled to based upon the 2020 return? You will qualify for the difference as a refundable credit on your 2020 return.
Example: Don and Shirley, newlyweds with no children, have an AGI that equals less than $150,000. They filed a joint return in 2019, and they receive an advance economic impact payment of $2,400. In 2020, they have a baby, and when they calculate their credit on their 2020 return, it equals $2,900 ($1,200 + $1,200 + $500). Since they only received $2,400 as an advance payment, they should receive a $500 refundable credit on their 2020 return. The credit will first reduce their tax, and then they will receive any excess as a refund.
As you can guess, you should keep Notice 1444 – Your Economic Impact Payment with your tax records since it documents the payment you actually received. You should keep this notice filed with all your other important tax records. These records include: W-2s from employers, 1099s from banks and other payers, and other income documents and records to support tax deductions.
Have questions about your economic impact payment or Notice 1444? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations. Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!
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