2. The taxation of your third stimulus check
You may wonder if your third stimulus check will be taxed at some point. Short and concise, no. Just like the first two rounds of stimulus payments, the third stimulus check will not be taxed either. This check represents an advanced payment of the Recovery Rebate tax credit, so it won’t be added to your taxable income.
Also, you won’t be asked to give the money back when filing your 2021 tax return. And it doesn’t matter if your third stimulus payment is actually higher than your 2021 credit. You won’t have to pay a dime. In case your last stimulus check is actually less than your 2021 credit, don’t worry… You will get the rest of the money when filing your 2021 tax return.
